National Flood Insurance Program (NFIP); Appeal of Decisions Relating to Flood Insurance Claims, 30294-30298 [E6-8180]

Agencies

• Federal Emergency Management Agency
• DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 71, Number 102 (Friday, May 26, 2006)]
[Rules and Regulations]
[Pages 30294-30298]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-8180]


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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 62

[FEMA-2005-0057]
RIN 1660-AA41


National Flood Insurance Program (NFIP); Appeal of Decisions 
Relating to Flood Insurance Claims

AGENCY: Federal Emergency Management Agency (FEMA), Department of 
Homeland Security.

ACTION: Interim final rule.

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SUMMARY: This interim final rule will amend the National Flood 
Insurance Program (NFIP) regulations to include an appeals process for 
NFIP policyholders as required by Congress in Section 205 of the 
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act (FIRA) of 2004.

DATES: Effective: This rule is effective June 26, 2006. Comments: 
Comments due on or before July 25, 2006.

ADDRESSES: You may submit comments, identified by Docket Number FEMA-
2005-0057, by one of the following methods:
    Federal eRulemaking Portal: https://www.regulations.gov. Follow the 
instructions for submitting comments.
    E-mail: FEMA-RULES@dhs.gov. Include Docket Number FEMA-2005-0057 in 
the subject line of the message.
    Fax: 202-646-4536.
    Mail/Hand Delivery/Courier: Rules Docket Clerk, Office of General 
Counsel, Federal Emergency Management Agency, Room 406, 500 C Street, 
SW., Washington, DC 20472.
    Instructions: All Submissions received must include the agency name 
and docket number (if available) for this interim final rule. All 
comments received will be posted without change to https://
www.regulations.gov, including any personal information provided. For 
detailed instructions on submitting comments, see the ``Public 
Participation'' heading of the SUPPLEMENTARY INFORMATION section of 
this document.
    Docket: For access to the docket to read background documents or 
comments received, go to the Federal eRulemaking Portal at https://
www.regulations.gov. Submitted comments may also be inspected at FEMA, 
Office of General Counsel, 500 C Street, SW., Room 406, Washington, DC 
20472.

FOR FURTHER INFORMATION CONTACT: James Shortley, Director of Claims, 
Federal Emergency Management Agency, 500 C Street SW., Washington, DC 
20472, (202) 646-3418 (Phone), (202) 646-4327 (facsimile), or 
James.Shortley@dhs.gov. (e-mail).

SUPPLEMENTARY INFORMATION:

Public Participation

    Interested persons are invited to participate in this notice by 
submitting written data, views, or arguments on all aspects of the 
interim final rule. FEMA also invites comments that relate to the 
economic, environmental, or federalism affects that might result from 
this interim final rule. Comments that will provide the most assistance 
to FEMA in developing this interim final rule will reference a specific 
portion of the interim final rule, explain the reason for any 
recommended change, and include data, information, or authority that 
support such recommended change. See ADDRESSES above for information on 
how to submit comments.

Background

    In the face of mounting flood losses and escalating costs of 
disaster relief to the taxpayers, the NFIP was established by Congress 
as part of the National

[[Page 30295]]

Flood Insurance Act of 1968 (the Act). Public Law 90-448, Title XII 
(Aug. 1, 1968), as amended, 42 U.S.C. 4001, et seq. The intent of the 
NFIP is to reduce future flood damage through community floodplain 
management ordinances, and to make risk-based flood insurance generally 
available for property owners. FEMA was designated by Congress to be 
the administrator of the NFIP.
    In 1983, FEMA partnered with the private insurance industry to 
expand the NFIP policy base. This partnership between FEMA and the 
private sector property insurance companies is termed the Write Your 
Own (WYO) Program.
    The WYO Program is a cooperative undertaking between the insurance 
industry and FEMA. The WYO Program allows participating property and 
casualty insurance companies to issue and service the NFIP Standard 
Flood Insurance policies (SFIPs) in their own names. FEMA also uses the 
services of contractors to process NFIP policy information from the WYO 
Companies and the agents and to service SFIPs sold directly by FEMA. 
Contractors are sometimes employed by the WYO Companies to handle and 
adjust claims.
    Section 205 of the Bunning-Bereuter-Blumenauer Flood Insurance 
Reform Act (FIRA) of 2004 (Pub. L. 108-264 (June 30, 2004)), requires 
FEMA to establish by regulation an additional process for the appeal of 
decisions of flood insurance claims issued through the NFIP. This 
process will enable policyholders to formally appeal the decisions of 
any insurance agent or adjuster, or insurance company, or any FEMA 
employee or contractor with respect to their SFIP claims, proofs of 
loss, and loss estimates.
    FEMA traditionally has used an informal process to handle appeals 
regarding decisions related to coverage or claims under the NFIP. The 
initial correspondence and associated claims documentation are reviewed 
and additional investigation is conducted as necessary. The Federal 
Insurance Administrator is responsible for decisions on informal 
claims, and the appropriate entities are notified to facilitate full 
resolution of the appeal. FEMA is now codifying into regulation, 
pursuant to the FIRA of 2004, its informal appeals process.
    Under this new appeals process, FEMA will acknowledge receipt of a 
policyholder's appeal in writing and will advise the policyholder if 
additional information is required in order to consider fully the 
appeal. FEMA will review the documentation submitted by the 
policyholder and will conduct any necessary additional investigation. 
FEMA will advise the policyholder and the appropriate flood insurance 
carrier of FEMA's decision regarding the appeal.

Discussion

    The Act and the SFIP authorize an insured (or policyholder) who is 
dissatisfied with an insurer's decision to deny a claim, in whole or 
part, to file a lawsuit in Federal district court for the disallowed 
portion of the claim, or to invoke the appraisal provision of the SFIP, 
a procedure to resolve disputes regarding the actual value of covered 
losses. This rule provides a formal appeals process for resolving flood 
insurance disputes prior to litigation.
    The appeals process outlined in this interim final rule does not 
abolish or replace the right to file a lawsuit against the insurer 
pursuant to the Act (42 U.S.C. 4072), nor does it expand or change the 
one-year statute of limitation to file suit against the insurer for the 
disallowed portion of the insured's claim. To avoid potentially 
conflicting results and duplicative efforts, an insured who files suit 
against an insurer is prohibited from filing an appeal under this 
appeals process.
    Similarly, this appeals process is not meant to provide an insured 
with multiple administrative, pre-litigation remedies. Accordingly, an 
insured who seeks to resolve issues regarding the actual cash value or, 
if applicable, replacement cost of damaged property, must elect to 
resolve this dispute through only one of the following: the appraisal 
provision in the SFIP or through this appeals process.
    Finally, this rule does not amend or change the conditions 
necessary to recover under the SFIP. In the case of a flood loss to 
insured property, the insured must comply with the requirements set out 
in the SFIP, including, but not limited to, providing the insurer with 
prompt notice of the loss, submitting a valid proof of loss within 60 
days after the loss, cooperating with the adjuster, separating damaged 
and undamaged property so that the insurer may examine it, and 
preparing an inventory of damaged personal property. See SFIP 44 CFR 
Part 61, App.A(1), Part 61, App. A(2), Part 61, App. A(3).
    This appeals process is available after the issuance of the 
insurer's final claim determination, which is the insurer's written 
denial, in whole or in part, of the insured's claim. Once the final 
claim determination is issued, an insured may appeal any action taken 
by the insurer, FEMA employee, FEMA contractor, insurance adjuster, or 
insurance agent. An insured must file an appeal within 60 days after 
receiving the insurer's final claim determination.

Administrative Procedure Act Statement

    In general, FEMA publishes a rule for public comment before issuing 
a final rule, under the Administrative Procedure Act (APA), 5 U.S.C. 
553 and 44 CFR 1.12. However, the APA exempts from public notice and 
comment requirements those rules pertaining to ``agency organization, 
procedure or practice.'' 5 U.S.C. 553(b)(A). As the instant rule merely 
prescribes an available procedure being established by FEMA, it is 
exempt from the notice and comment requirements of the APA.
    Moreover, the APA provides an exception from the requirements where 
the agency for good cause finds the procedures for comment and response 
contrary to public interest. For the reasons set forth below, FEMA has 
determined that such good cause is present in the instant case.
    Hurricane Katrina caused monumental flooding which Hurricane Rita 
exacerbated. The magnitude and severity of the flood losses related to 
these hurricanes are unprecedented in the history of the NFIP. FEMA 
estimates that Hurricanes Katrina, Rita, and Wilma will result in 
approximately 240,000 flood insurance claims. This significantly 
exceeds the highest number of claims filed from any single event in the 
NFIP's history, and will more than triple the total number of claims 
filed in 2004. The public benefit of this rule is to establish a formal 
appeals process as soon as possible. Therefore, FEMA believes it is 
contrary to the public interest to delay the benefits of this rule. In 
accordance with the Administrative Procedure Act, 5 U.S.C. 553(d)(3), 
FEMA finds that there is good cause for the interim final rule to be 
published without a prior public comment period in order to allow 
processes for the appeals to be put into place prior to implementation.

National Environmental Policy Act

    This interim final rule falls within the exclusion category 44 CFR 
10.8(d)(2)(ii), which addresses the preparation, revision, and adoption 
of regulations, directives, and other guidance documents related to 
actions that qualify for categorical exclusions. Since this is an 
administrative action that qualifies for the exclusion category 
described in 44 CFR 10.8(d)(2)(ii) and because no other extraordinary 
circumstances have been identified, this interim final rule will not 
require the preparation of either an environmental

[[Page 30296]]

assessment or an environmental impact statement as defined by the 
National Environmental Policy Act.

Executive Order 12866, Regulatory Planning and Review

    FEMA has prepared and reviewed this rule under the provisions of 
Executive Order 12866, Regulatory Planning and Review. Under Executive 
Order 12866, 58 FR 51735, October 4, 1993, a significant regulatory 
action is subject to OMB review and the requirements of the Executive 
Order. The Executive Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities or the principles set forth in the 
Executive Order.
    In determining how to move forward with this rule, binding 
arbitration was not an option because the NFIP statutory authority 
prohibits it. In the case of non-binding arbitration or mediation, FEMA 
recognizes that mediation is an important tool for the resolution of 
claim disputes and encourages WYO Companies and policyholders to 
participate, or continue to participate, in mediation where it may lead 
to an expeditious and mutual resolution of a disputed claim. Mediation 
is most effective when it occurs early in the process. Therefore FEMA 
encourages the WYO Companies to offer this option to its flood 
insurance policyholders since some WYO carriers already offer this 
option as a part of their standard claims resolution service for their 
other lines of insurance. However, once the dispute has evolved, FEMA 
believes the appeals process as described in this interim final rule 
would be the most cost effective and efficient mechanism.
    Under the new appeals process, when a NFIP policyholder does not 
agree with a decision made by an insurer, including a determination of 
any insurance agent, adjuster, insurance company, or any FEMA employee 
or contractor with respect to a claim, proof of loss and loss estimate 
the policyholder may submit an appeal of the insurer's decision to 
FEMA. FEMA will provide written acknowledgement of the policyholder's 
appeal and will advise the policyholder if additional information is 
required in order to consider the appeal. FEMA will review the 
documentation submitted by the policyholder and will conduct any 
additional investigation that is necessary to formulate a decision 
concerning the appeal. FEMA will advise the policyholder and the 
appropriate flood insurance carrier of FEMA's decision regarding the 
appeal.
    Currently, when policyholders are not satisfied with a claim 
settlement they may informally appeal to FEMA. The initial 
correspondence and associated claims documentation are reviewed and 
additional investigation is conducted as necessary. The Federal 
Insurance Administrator is responsible for decisions on informal 
claims, and the appropriate entities are notified to facilitate the 
full resolution of the appeal.
    Under section 1341 of the Act (42 U.S.C. 4072) and the provisions 
of the SFIP, a policyholder may file suit in the United States District 
Court of the district in which the insured property was located at the 
time of loss within one year after the written denial of all or part of 
the claim. This one year time period starts from the date of the 
original denial and not the date of a decision regarding an appeal. A 
policyholder may choose the appraisal process under the policy, or 
participate in the appeals process created by this interim final rule 
instead of filing a lawsuit. The one year period for filing a suit is 
not extended by the submission of an appeal or participating in the 
appraisal provision of the SFIP.
    Historically, significantly less than 1 percent of all NFIP claims 
result in litigation. A policyholder who chooses to file suit either 
sues a WYO Company if the policy was issued by a WYO Company or the 
Director of FEMA if the policy was issued directly by FEMA. The 
policyholder is responsible for their litigation costs including filing 
fees, attorney costs, and expenses. Federal law does not allow the 
policyholder to recover attorney's fees or other legal expense if they 
prevail in the lawsuit.
    The NFIP received 686,389 claims beginning in fiscal year 1996 and 
ending with fiscal year 2005. Using these years as a reference point 
for the impact on claims when this interim final rule establishes a 
formal appeals process, it is estimated that in a typical year, claims 
will be slightly more than 68,000. In 2004, NFIP received 75,022 
claims; of those claims, FEMA received 360 informal appeals concerning 
claim disputes. The total number of claims received from Hurricanes 
Katrina, Rita, and Wilma is approximately 240,000 which is 
approximately three and a third times greater than an average year and 
more than triple the total number of claims filed in 2004. Based on the 
above, the number of appeals is estimated to be three and a third times 
the number for an average year, or approximately 1,200. However, given 
the magnitude and severity of Hurricane Katrina, FEMA believes that 
with the publication of this interim final rule and the distribution of 
the National Flood Insurance Program Flood Insurance Claims Handbook, 
FEMA estimates that the number of appeals could be as high as 
approximately 2,000 in 2006. FEMA anticipates that, after 2006, it will 
receive somewhere between the lower average of 360 and 1200 appeals. 
FEMA also anticipates that a successful appeal will result in an 
average range of approximately $3,000 to $8,000 more being paid to a 
policyholder. Therefore, this interim final rule is not a economically 
significant regulatory action; as, FEMA estimates that formalizing 
FEMA's appeals process will result in less than $10 million dollars in 
additional flood insurance payments.
    Therefore, this rule is a significant regulatory action, but not an 
economically significant regulatory action within the definition of 
section 3(f) of Executive Order 12866, and it adheres to the principles 
of regulation of the Executive Order. OMB has reviewed this rule under 
the provisions of the Executive Order.

Paperwork Reduction Act

    This interim final rule contains information collection 
requirements subject to the Paperwork Reduction Act of 1995. Under the 
Paperwork Reduction Act, a person may not be penalized for failing to 
comply with an information collection that does not display a currently 
valid OMB control number.
    FEMA has submitted an information collection request for review and 
approval of an existing collection in use without an OMB control number 
under the emergency processing procedures in OMB regulation 5 CFR 
1320.13, and requested expedited approval, allowing FEMA to use the 
collection for 180 days. The proposed information collection request is 
published to solicit and obtain comments from the public and affected 
agencies. FEMA will follow this emergency request with a request for a 
3-year approval under normal clearance

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procedures in accordance with the provisions of OMB regulation 5 CFR 
1320.10. Comments should be directed to OMB, Office of Information and 
Regulatory Affairs, Attention: FEMA Desk Officer, Washington, DC 20530.
    FEMA will accept comments on the proposed collection through July 
25, 2006. All comments and suggestions, or questions regarding 
additional information, including obtaining a copy of the proposed 
information collection instrument with instructions, should be directed 
to Chief, Records Management Section, Information Resources Management 
Branch, Information Technology Services Division, FEMA, 500 C Street, 
SW., Room 306, Washington, DC 20472. FEMA requests written comments and 
suggestions from the public and affected agencies addressing one or 
more of the following points:
    (1) Whether the proposed collection of information is necessary for 
the proper performance of the functions of the agency, including 
whether the information will have practical utility.
    (2) The accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used.
    (3) Suggestions to enhance the quality, utility, and clarity of the 
information to be collected.
    (4) Suggestions to minimize the burden of the collection of 
information on those who are to respond, including through the use of 
appropriate automated, electronic, mechanical, or other technological 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of responses.
    The following is an overview of this information collection:
    (1) Type of Information Collection: Existing Collection In Use 
Without an OMB Control Number.
    (2) Title of the Forms/Collection: National Flood Insurance Program 
Appeals Process.
    (3) Agency form number, if any, and the applicable component of 
FEMA sponsoring the collection: Forms are not used in the appeals 
process, but rather the policyholder will submit a letter requesting an 
appeal.
    (4) Affected public who will be asked or required to respond, as 
well as a brief abstract. Primary: National Flood Insurance Program 
policyholders that dispute the results of their claim, proof of loss, 
and loss estimate determinations. These policyholders will be asked to 
provide relevant information that will facilitate the resolution of the 
appeal. Brief abstract: This information collection implements the 
mandates of section 205 of the FIRA of 2004 to establish by regulation 
what was traditionally an informal appeals process for NFIP 
policyholders in cases of unsatisfactory decisions on claims, proof of 
loss, and loss estimates made by any insurance company, agent, 
adjuster, or FEMA employee or contractor.
    (5) An estimate of the total number of respondents and the amount 
of time estimated for an average respondent to respond to the FIRA of 
2004 appeals process: It is estimated that in a typical year claims 
received will be approximately 68,000 resulting in 360 appeals. 
However, considering the recent impact of Hurricanes Katrina, Rita, and 
Wilma in the number of claims received referenced earlier, the program 
has estimated that approximately 2,000 respondents per year will file 
an appeal, each spending an average of two hours drafting the letter 
and compiling the required information.
    (6) An estimate of the total public burden (in hours) associated 
with the collection: 4,000 hours per year.
    If additional information is required, contact: Sylvia Correa, 
FEMA, 500 C Street, SW., Room 316, Washington, DC 20472.

Executive Order 13175, Indian Tribal Governments

    This rule does not have tribal implications under Executive Order 
13175, Consultation and Coordination with Indian Tribal Governments, 
because it does not have a substantial direct effect on one or more 
Indian tribes, on the relationship between the Federal Government and 
Indian tribes, or on the distinction of power and responsibilities 
between the Federal Government and Indian tribes. It does not have a 
substantial direct effect because the rule does not make distinctions 
of where the property insured is located, the rule will apply uniformly 
to all policyholders regardless if they live on or off Tribal lands.

Executive Order 13132, Federalism

    Executive Order 13132, Federalism, dated August 4, 1999, sets forth 
principles and criteria that agencies must adhere to in formulating and 
implementing policies that have federalism implications, that is, 
regulations that have substantial direct effects on the States, or on 
the distribution of power and responsibilities among the various levels 
of government. Federal agencies must closely examine the statutory 
authority supporting any action that would limit the policymaking 
discretion of the States, and to the extent practicable, must consult 
with State and local officials before implementing any such action.
    FEMA has reviewed this rule under Executive Order 13132 and has 
concluded the rule does not have federalism implications as defined by 
the Executive Order. FEMA has determined the rule does not 
significantly affect the rights, roles, and responsibilities of States, 
and involves no preemption of State law nor does it limit State 
policymaking discretion.

Executive Orders 12898 and 12948, Environmental Justice

    Under Executive Orders 12898 and 12948, respectively, ``Federal 
Actions to Address Environmental Justice in Minority Populations and 
Low-Income Populations,'' FEMA incorporates environmental justice into 
our policies and programs. Executive Order 12898 requires each Federal 
agency to conduct its programs, policies, and activities that 
substantially affect human health or the environment in a manner that 
ensures those programs, policies, and activities do not have the effect 
of excluding persons from participation in, denying persons the 
benefits of, or subjecting persons to discrimination because of their 
race, color, or national origin. Executive Order 12898 also requires 
that each Federal Agency shall identify and address as appropriate, 
disproportionately high and adverse human health or environmental 
effects of its programs, policies, and activities on minority 
populations and low-income populations.
    FEMA does not anticipate that actions under the rule would have a 
disproportionately high and adverse human health effect on any segment 
of the population. FEMA has determined that the requirements of these 
Executive Orders do not apply to this rule.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) mandates that an agency 
conduct an RFA analysis when an agency is ``required by section 553 * * 
*, or any other law, to publish general notice of proposed rulemaking 
for any proposed rule, or publishes a notice of proposed rulemaking for 
interpretative rule involving the internal revenue laws of the United 
States * * *.'' 5 U.S.C. 603(a). RFA analysis is not required when a 
rule is exempt from notice and comment rulemaking under 5 U.S.C. 
553(b). FEMA has determined that good cause exists under 5 U.S.C. 
553(b)(B) to exempt this rule from the notice and comment requirements 
of 5 U.S.C.

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553(b). Therefore no RFA analysis under 5 U.S.C. 603 is required for 
this rule.

Executive Order 12988

    This interim final rule meets the applicable standards of Executive 
Order 12988.

List of Subjects in 44 CFR Part 62

    Flood insurance.


0
Accordingly, for the reasons set forth in the preamble, FEMA amends 44 
CFR part 62 as follows:

PART 62-SALE OF INSURANCE AND ADJUSTMENT OF CLAIMS

0
1. The authority citation for part 62 continues to read as follows:

    Authority: 42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of 
1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; E.O. 12127 of Mar. 31, 
1979, 44 FR 19367, 3 CFR, 1979 Comp., p. 376.


0
2. Revise the title of subpart B of part 62, to read as follows:

Subpart B--Claims Adjustment, Claims Appeals, and Judicial Review

0
3. Add Sec.  62.20 to read as follows:


Sec.  62.20  Claims appeals.

    (a) Definitions.
    Administrator means the Federal Insurance Administrator.
    Appeal decision means the disposition of the appeal by the 
Administrator.
    Decision means the insurer's final claim determination, which is 
the insurer's written denial, in whole or in part, of the insured's 
claim.
    (b) Appeal. A National Flood Insurance Program (NFIP) policyholder, 
whether insured by a participating Write-Your-Own (WYO) Company or 
directly by the Federal Emergency Management Agency (FEMA), may appeal 
a decision, including a determination of any insurance agent, adjuster, 
insurance company, or any FEMA employee or contractor with respect to a 
claim, proof of loss, and loss estimate. In order to file an appeal, 
the insured must comply with all requirements set out in the Standard 
Flood Insurance Policy (SFIP). This appeals process is available after 
the issuance of the insurer's final claim determination, which is the 
insurer's written denial, in whole or in part, of the insured's claim. 
Once the final claim determination is issued, an insured may appeal any 
action taken by the insurer, FEMA employee, FEMA contractor, insurance 
adjuster, or insurance agent.
    (c) Limitations on Appeals.
    The appeals process is intended to resolve claim issues and is not 
intended to grant coverage or limits that are not provided by the SFIP. 
Filing an appeal does not waive any of the requirements for perfecting 
a claim under the SFIP or extend any of the time limitations set forth 
in the SFIP.
    (1) Disputes that are or have been subject to appraisal as provided 
for in the SFIP cannot be appealed under this section.
    (2) When a policyholder files an appeal on any issue, that issue is 
no longer subject to resolution by appraisal or other pre-litigation 
remedies.
    (d) Litigation preclusion. An insured who files suit against an 
insurer on the flood insurance claim issue is prohibited from filing an 
appeal under this section. All appeals submitted for decision but not 
yet resolved shall be terminated upon notice of the commencement of 
litigation regarding the claim.
    (e) Procedures. To pursue an appeal under this section a 
policyholder must:
    (1) Submit a written appeal to FEMA within 60 days from the date of 
the decision. The appeal should be sent to: Federal Emergency 
Management Agency, Federal Insurance Administrator, Mitigation 
Division, 500 C Street, SW., Washington, DC 20472;
    (2) Identify relevant policy and claim information and state the 
basis for the appeal;
    (3) Submit relevant documentation; and
    (4) Submit a copy of the proof of loss submitted to the insurer as 
required in the policy.
    (f) Appeal resolution. (1) FEMA will acknowledge, in writing, 
receipt of a policyholder's appeal.
    (2) The Administrator will review the appeal documents and may 
notify the policyholder in writing of the need for additional 
information. A request for the additional information will include the 
date by which the information must be provided, and shall in no case be 
less than 14 calendar days. Failure to provide the requested 
information in full, or to request an extension by the due date, may 
result in a dismissal of the appeal. A re-inspection of the 
policyholder's property may be conducted at the discretion of the 
Administrator to gather more information. The Administrator will ensure 
that all information necessary to rule on the appeal has been provided 
prior to making an appeal decision.
    (3) The Administrator will review the appeal documents, including 
any reinspection report, if appropriate. The Administrator will provide 
an appeal decision in writing to the policyholder and insurer. No 
further administrative review will be provided to the insured.
    (4) A policyholder who does not agree with FEMA's appeal decision 
should refer to the SFIP, for options for further action (see Part 61, 
App. A(1) VII.R., Part 61, App. A(2) VII.R., and Part 61, App. A(3) 
VIII.R.). The one-year period to file suit commences with the written 
denial from the insurer and is not extended by the appeals process.

    Dated: May 23, 2006.
R. David Paulison,
Acting Director, Federal Emergency Management Agency, Department of 
Homeland Security.
 [FR Doc. E6-8180 Filed 5-25-06; 8:45 am]
BILLING CODE 9110-11-P