National Flood Insurance Program (NFIP); Assistance to Private Sector Property Insurers, Availability of FY2008 and FY2009 Arrangements, 46028 [E8-18242]

Agencies

• Federal Emergency Management Agency
• DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 73, Number 153 (Thursday, August 7, 2008)]
[Notices]
[Page 46028]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-18242]



[[Page 46028]]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency


National Flood Insurance Program (NFIP); Assistance to Private 
Sector Property Insurers, Availability of FY2008 and FY2009 
Arrangements

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: Each year the Federal Emergency Management Agency (FEMA) is 
required by the Write-Your-Own (WYO) program Financial Assistance/
Subsidy Arrangement (Arrangement) to notify the private insurance 
companies (Companies) and to make available to the Companies the terms 
for subscription or re-subscription to the Arrangement. In keeping with 
that requirement, this notice provides the terms to the Companies to 
subscribe or re-subscribe to the Arrangement.

FOR FURTHER INFORMATION CONTACT: Edward L. Connor, FEMA, 500 C Street, 
SW., Washington, DC 20472, 202-646-3429 (phone), 202-646-3445 
(facsimile), or Edward.Connor@dhs.gov (e-mail).

SUPPLEMENTARY INFORMATION: Under the Write-Your-Own (WYO) program 
Financial Assistance/Subsidy Arrangement (Arrangement), approximately 
90 private sector property insurers issue flood insurance policies and 
adjust flood insurance claims under their own names based on an 
Arrangement with the Federal Insurance Administration (FIA) published 
at 44 CFR part 62, appendix A. The WYO insurers receive an expense 
allowance and remit the remaining premium to the Federal Government. 
The Federal Government also pays WYO insurers for flood losses and pays 
loss adjustment expenses based on a fee schedule. In addition, under 
certain circumstances reimbursement for litigation costs, including 
court costs, attorney fees, judgments, and settlements, are paid by FIA 
based on documentation submitted by the WYO insurers. The complete 
Arrangement is published in 44 CFR Part 62, appendix A. Each year FEMA 
is required to publish in the Federal Register and make available to 
the Companies the terms for subscription or re-subscription to the 
Arrangement.
    FEMA published a notice at 72 FR 41770, on July 31, 2007, that 
during September 2007, FEMA would send a copy of the offer for the 
FY2008 Arrangement, together with related materials and submission 
instructions, to all private insurance companies participating under 
the current FY2007 Arrangement.
    The FY2007 Arrangement was extended by FEMA into FY2008 pending 
publication of an Interim Rule and the release of new Schedules. The 
Interim Rule published April 3, 2008 (73 FR 18182), and the revised 
Schedules were finalized June 1, 2008.
    The Interim Rule implemented changes to the Arrangement as follows:
    1. Changes made address the WYO Companies' cooperation in helping 
ensure that agents writing flood insurance under the National Flood 
Insurance Program (NFIP) avail themselves of the training opportunities 
needed to meet the minimum NFIP training requirements called for in 
section 207 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform 
Act of 2004, Public Law 108-264, 118 Stat. 727 (42 U.S.C. 4011 note).
    2. In certain heavy loss years, the potential exists for the NFIP 
to exhaust its authority to borrow funds from the Treasury to pay 
claims. In such an event, there may be a period of time during which no 
funds are available in the Treasury until the Congress takes action to 
either increase the program's borrowing authority, or appropriate funds 
to relieve the debt. The Interim Rule revised 44 CFR part 62, appendix 
A, Article VII, section A. to provide that in such circumstances, the 
Federal Insurance Administrator will suspend the NFIP's payment of 
claims until funds are again available in the Treasury, and that the 
WYO Companies are not required to pay claims from their own funds in 
the event of such a suspension.
    3. FEMA revised 44 CFR part 62, appendix A, Article III, section 
C.1. of the Arrangement which deals with the Unallocated Loss 
Adjustment Expense (ULAE) for which WYO Companies receive reimbursement 
under the Arrangement. The ULAE rate used to be an expense 
reimbursement of 3.3 percent of the incurred loss (except that it did 
not include ``incurred but not reported''). The IR removed the ULAE 
compensation percentage from the Arrangement. Instead, the percentage 
is now communicated by FEMA to the WYO Companies through an ULAE 
Schedule.
The only changes to the FY2008 Arrangement were those that were 
implemented in the April 3, 2008 Interim Rule. No changes are planned 
for the FY2009 Arrangement.
    During August 2008, FEMA will send a copy of the offer for the 
FY2009 Arrangement, together with related materials and submission 
instructions, to all private insurance companies participating under 
the current FY2008 Arrangement. Any private insurance company not 
currently participating in the WYO Program but wishing to consider 
FEMA's offer for either FY2008 or FY2009 may request a copy by writing: 
Federal Emergency Management Agency, Mitigation Division, Attn: WYO 
Program, 500 C Street, SW., Washington, DC 20472, or contact Edward 
Connor at 202-646-3445 (Facsimile), or Edward.Connor@dhs.gov (e-mail).

    Dated: August 1, 2008.
Michael Buckley.
Deputy Assistant Administrator, National Flood Insurance Program, 
Federal Emergency Management Agency, Department of Homeland Security.
 [FR Doc. E8-18242 Filed 8-6-08; 8:45 am]
BILLING CODE 9110-11-P