National Flood Insurance Program (NFIP); Assistance to Private Sector Property Insurers, Notice of Fiscal Year (FY) 2025 Arrangement, 22420-22429 [2024-06805]
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Town of Lookout Mountain .......................................................................
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Unincorporated Areas of Hamilton County ..............................................
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Town Hall, 1111 Ridgeway Avenue, Signal Mountain, TN 37377.
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Unincorporated Areas of Sequatchie County ...........................................
participating in the National Flood
Insurance Program’s Write Your Own
Program.
[FR Doc. 2024–06780 Filed 3–29–24; 8:45 am]
BILLING CODE 9110–12–P
Interested insurers must submit
intent to subscribe or re-subscribe to the
Arrangement by July 1, 2024.
FOR FURTHER INFORMATION CONTACT:
Karolyn Kiss, Federal Insurance
Directorate (FID), Resilience FEMA, 400
C St. SW, Washington, DC 20472 (mail);
(202) 646–3140 (phone); or
karolyn.kiss@fema.dhs.gov (email).
SUPPLEMENTARY INFORMATION:
DATES:
DEPARTMENT OF HOMELAND
SECURITY
Federal Emergency Management
Agency
[Docket ID FEMA–2024–0014]
National Flood Insurance Program
(NFIP); Assistance to Private Sector
Property Insurers, Notice of Fiscal
Year (FY) 2025 Arrangement
I. Background
Federal Emergency
Management Agency, Department of
Homeland Security.
ACTION: Notice.
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AGENCY:
The Federal Emergency
Management Agency announces the
Fiscal Year 2025 Financial Assistance/
Subsidy Arrangement for private
property insurers interested in
SUMMARY:
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Sequatchie County Clerk’s Office, 15 Cherry Street, Dunlap, TN 37327.
The National Flood Insurance Act of
1968 (NFIA) (42 U.S.C. 4001 et seq.)
authorizes the Administrator of the
Federal Emergency Management Agency
(FEMA) to establish and carry out a
National Flood Insurance Program
(NFIP) to enable interested persons to
purchase flood insurance. See 42 U.S.C.
4011(a). Under the NFIA, FEMA may
use insurance companies and other
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insurers, insurance agents and brokers,
and insurance adjustment organizations
as fiscal agents of the United States to
help it carry out the NFIP. See 42 U.S.C.
4071. To this end, FEMA may ‘‘enter
into any contracts, agreements, or other
appropriate arrangements’’ with private
insurance companies to use their
facilities and services in administering
the NFIP on such terms and conditions
as they agree upon. See 42 U.S.C.
4081(a).
Pursuant to this authority, FEMA
enters into a standard Financial
Assistance/Subsidy Arrangement
(Arrangement) with private sector
property insurers, also known as Write
Your Own (WYO) companies, to sell
NFIP flood insurance policies under
their own names and adjust and pay
claims arising under the Standard Flood
Insurance Policy (SFIP). Each
Arrangement entered into by a WYO
company must be in the form and
substance of the standard Arrangement,
a copy of which is published in the
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Federal Register annually, at least 6
months prior to becoming effective. See
44 CFR 62.23(a). To learn more about
FEMA’s WYO Program, please visit
https://nfipservices.floodsmart.gov/
write-your-own-program.
II. Notice of Availability
Insurers interested in participating in
the WYO Program for Fiscal Year 2025
must contact Karolyn Kiss at
karolyn.kiss@fema.dhs.gov by July 1,
2024.
Prior participation in the WYO
Program does not guarantee FEMA will
approve continued participation. FEMA
will evaluate requests to participate in
light of publicly available information,
industry performance data, and other
criteria listed in 44 CFR 62.24 and the
FY 2025 Arrangement, copied below.
FEMA encourages private insurance
companies to supplement this
information with customer satisfaction
surveys, industry awards or recognition,
or other objective performance data. In
addition, private insurance companies
should work with their vendors and
other service providers involved in
servicing and delivering their insurance
lines to ensure FEMA receives the
information necessary to effectively
evaluate the criteria set forth in its
regulations.
FEMA will send a copy of the offer for
the FY 2025 Arrangement, together with
related materials and submission
instructions, to all private insurance
companies successfully evaluated by the
NFIP. If FEMA, after conducting its
evaluation, chooses not to renew a
Company’s participation, FEMA, at its
option, may require the continued
performance of all or selected elements
of the FY 2024 Arrangement for a period
required for orderly transfer or cessation
of the business and settlement of
accounts, not to exceed 18 months. See
FY 2024 Arrangement, Article II.D. All
evaluations, whether successful or
unsuccessful, will inform both an
overall assessment of the WYO Program
and any potential changes FEMA may
consider regarding the Arrangement in
future fiscal years.
Any private insurance company with
questions may contact FEMA at:
Karolyn Kiss, Federal Insurance
Directorate, Resilience, FEMA, 400 C St.
SW, Washington, DC 20472 (mail); (202)
646–3140 (phone); or karolyn.kiss@
fema.dhs.gov (email).
III. Fiscal Year 2025 Arrangement
Pursuant to 44 CFR 62.23(a), FEMA
must publish the Arrangement at least
six months prior to the Arrangement
becoming effective. The FY 2025
Arrangement provided below is
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substantially similar to the previous
year’s Arrangement, but includes the
following changes:
1. In Article I.A, FEMA is clarifying
that the Arrangement is between FEMA
and the Company.
2. In Article II.B, FEMA is removing
‘‘or not re-subscribe,’’ because it is
addressed in Article II.D, as revised.
3. In Article II.D, FEMA is adding a
title and redesignating the whole Article
in subparagraphs II.D.1 through II.D.8
for clarity.
4. In newly-designated Article II.D.1,
FEMA is removing ‘‘in addition to the
requirements of Article II.B, in order
to,’’ because the time requirements
appeared to conflict with the
requirements to notify. FEMA resolved
the conflicting timelines by clarifying
that the Company must notify FEMA of
their intent to not resubscribe to the
WYO Program within thirty (30)
calendar days from their decision, ‘‘but
no later than ninety (90) calendar days
from the publication in the Federal
Register’’ for the next fiscal year.
5. In newly-designated Article II.D.2,
FEMA is adding this subparagraph to
capture the situation where a Company
elects to no longer continue selling or
renewing NFIP policies in a particular
state, territory, area or subdivision,
while remaining in the WYO Program.
6. In newly-designated Article II.D.3,
FEMA is adding the words ‘‘in whole or
in part’’ regarding the transfer of
activities to capture the situation when
the Company decides to stop selling or
renewing in a particular community.
FEMA also increased the period that
FEMA may, at its option, require for
orderly transfer and settlement of
accounts from eighteen (18) months to
forty-eight (48) months.
7. FEMA is adding two (2) additional
subparagraphs in Article II.D (II.D.7 and
II.D.8), reiterating that FEMA will not
reimburse for costs associated with the
transfer of activities and that the
Company will hold FEMA harmless for
the Company’s failure to timely transfer
data and information.
8. For clarity and alignment with
subparagraph II.E.2, in Article II.E,
FEMA is removing ‘‘under’’ and ‘‘in its
entirety’’ in subparagraph II.E.1 and
clarifying that FEMA can cancel
financial assistance ‘‘and’’ this
Arrangement for any of the reasons
stated therein. FEMA is also updating
citations to subparagraphs II.E.2 and
II.E.3 in the Arrangement to align with
subparagraph redesignations.
9. In Article II.F, FEMA is moving the
first three (3) sentences relating to
receivership or run-off status and
redesignating them in a new Article II.G,
as revised, without material change to
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the remaining provisions relating to the
Company’s financial health notice
requirements. Only minor edits are
made to reflect the fact that some states
do not have a ‘‘State Department of
Insurance,’’ by inserting more general
terms and providing some examples.
10. In newly-designated Article II.G,
FEMA is removing repetitive language
by citing to the language in Article II.F.2
(the Company receives an order or
directive making it unable to carry out
its obligations under this Arrangement
by the insurance industry regulatory
body), and adding a new requirement in
newly-added subparagraphs II.G.2. In
II.G.2, FEMA is requiring that if a
Company is subject to II.F.2, the
Company must file a motion to stay the
proceedings on any and all pending
litigation.
11. FEMA is redesignating the
remaining two (2) subparagraphs in
Article II as II.H. and II.I.
12. In Article III.A.5.f, FEMA is
adding a new requirement to the
Catastrophic Claims Handling Plan
explaining the Company’s ability to
maintain sufficient adjuster and
examiner resources during a
catastrophic event.
13. In Article III.A.5.h., FEMA is
adding ‘‘and required procedures’’ and
‘‘in its possession and control or in the
possession and control of its vendors or
contractors’’ to obtain additional
information from the Company on its
Privacy Protection Plan standards and
process for using and maintaining
personally identifiable information.
14. In Article III, FEMA is adding a
new subparagraph III.D. requiring a
monthly premium payment option for
policyholders should FEMA implement
such an option during the Arrangement
term. FEMA is redesignating the
remaining subparagraphs as III. E.
through M and adding a new
subparagraph III.N.
15. In the new Article III.N, FEMA is
adding an additional provision on
‘‘Company’s Service Providers’’ to
ensure the Company conducts
appropriate oversight of its vendors,
agents, independent adjusters and
contractors.
16. In Article IV.C.3, FEMA is adding
a citation for special allocated loss
adjustment expenses.
17. In Article IV.D.2, FEMA is
removing ‘‘litigation’’ and inserting
‘‘awards, judgments for damages or
settlements’’ because litigation expenses
are paid as special allocated loss
adjustment expenses.
18. FEMA is redesignating Article
IV.D.3 as Article IV.E under a new title,
‘‘Litigation Oversight and Reimbursable
Expenses.’’
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19. In newly-redesignated Article
IV.E.2, FEMA is deleting ‘‘the Company
should utilize its customary business
practices for its defense of property and
casualty litigation, including billing
rates and standards’’ and is adding ‘‘the
Company must consult with FEMA’s
WYO Oversight Team’’ to assist FEMA
in better overseeing WYO NFIP
litigation expenses.
20. In newly-redesignated Article
IV.E.3, FEMA reorganized existing
subparagraphs from Article IV.D.3 and
added language to clarify when and how
FEMA will reimburse the Company for
awards, judgments for damages and any
costs to defend litigation.
21. In Article VI.C, FEMA is
increasing the term for final settlement
of accounts from eighteen (18) months
to forty-eight (48) months to enable
additional time for orderly settlement of
accounts and to accommodate similar
changes in Art. II.D.3. Additionally, the
language ‘‘subject to audit’’ is moved to
clarify the need of an audit of the final
settlement and all of the Company’s
obligations it encompasses.
22. In Article XII.A., FEMA is deleting
the subtitle ‘‘Audits’’ and adding ‘‘and
to enable FEMA to carry out the NFIP’’
to clarify that FEMA may need to access
these documents for reasons other than
audits.
The Fiscal Year 2025 Arrangement
reads as follows:
Financial Assistance/Subsidy
Arrangement
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Article I. General Provisions
A. Parties. The parties to the Financial
Assistance/Subsidy Arrangement are the
Federal Emergency Management Agency
(FEMA) and the Company. This
Arrangement is solely between FEMA
and the Company, and in no instance
shall any of the Company’s service
providers (as defined at III.N) have any
rights under this Arrangement.
B. Purpose. The purpose of this
Financial Assistance/Subsidy
Arrangement is to authorize the
Company to sell and service flood
insurance policies made available
through the National Flood Insurance
Program (NFIP) and adjust and pay
claims arising under such policies as
fiscal agents of the Federal Government.
C. Authority. This Financial
Assistance/Subsidy Arrangement is
authorized under the National Flood
Insurance Act of 1968 (NFIA) (42 U.S.C.
4001 et seq.), and in particular, section
1345(a) of the NFIA (42 U.S.C. 4081(a)),
as implemented by 44 CFR 62.23 and
62.24.
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Article II. Commencement and
Termination
A. The effective period of this
Arrangement begins on October 1, 2024,
and terminates no earlier than
September 30, 2025, subject to
extension pursuant to Articles II.D and
II.I. FEMA may provide financial
assistance only for policy applications,
renewals, and endorsements accepted
by the Company during this period
pursuant to the Program’s effective date,
underwriting, and eligibility rules.
B. Pursuant to 44 CFR 62.23(a), FEMA
will publish the Arrangement and the
terms for subscription or re-subscription
for Fiscal Year 2026 in the Federal
Register no later than April 1, 2025.
Within ninety (90) calendar days of
such publication, the Company must
notify FEMA of its intent to re-subscribe
to the WYO Program for the following
term.
C. Requesting Participation in WYO
Program. Insurers interested in
participating in the WYO Program, that
have never participated or are returning
to the Program after a period of nonparticipation, must submit a written
request to participate.
1. Participation is then contingent on
submission of both:
a. A completed application package,
the requirements and contents of which
FEMA will outline in its written
response to the request to participate.
b. A completed operations plan,
whose requirements and contents are
outlined at Article III.A.5 of this
Arrangement.
2. Insurers who are already
participating in the program must
submit their operations plan within
ninety (90) calendar days as outlined in
Article III.A.5 of this Arrangement.
D. Uninterrupted Service to
Policyholders and Transfer of Data and
Records.
1. To ensure uninterrupted service to
policyholders, the Company must notify
FEMA within thirty (30) calendar days
from when the Company elects not to
re-subscribe to the WYO Program during
the term of this Arrangement, but no
later than ninety (90) calendar days
from the publication in the Federal
Register of the Fiscal Year 2026
Arrangement.
2. The Company must notify FEMA as
soon as possible, but no later than thirty
(30) calendar days from when the
Company elects to no longer sell or
renew NFIP policies in a community as
defined in 44 CFR 59.1.
3. If so notified under Article II.D.1 or
II.D.2, or if FEMA chooses not to renew
the Company’s participation, FEMA, at
its option, may require the continued
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performance of all or selected elements
of this Arrangement for the period
required for orderly transfer or cessation
of business and settlement of accounts,
not to exceed forty-eight (48) months
after the end of this Arrangement
(September 30, 2025), and may either
require transfer of activities, in whole or
in part, to FEMA under Article II.D.4 or
allow transfer of activities, in whole or
in part, to another WYO company under
Article II.D.6.
4. FEMA may require the Company to
transfer all activities under this
Arrangement to FEMA. Within thirty
(30) calendar days of FEMA’s election of
this option, the Company must deliver
to FEMA the following:
a. A plan for the orderly transfer to
FEMA of any continuing responsibilities
in administering the policies issued by
the Company under the Program
including provisions for coordination
assistance.
b. All data received, produced, and
maintained through the life of the
Company’s participation in the Program,
including certain data, as determined by
FEMA, in a standard format and
medium.
c. All claims and policy files,
including those pertaining to receipts
and disbursements that have occurred
during the life of each policy. In the
event of a transfer of the services
provided, the Company must provide
FEMA with a report showing, on a
policy basis, any amounts due from or
payable to policyholders, agents,
brokers, and others as of the transition
date.
d. All funds in its possession with
respect to any policies transferred to
FEMA for administration and the
unearned expenses retained by the
Company.
e. A point of contact within the
Company responsible for addressing
issues that may arise from the
Company’s previous participation under
the WYO Program.
5. Within ninety (90) calendar days of
FEMA receiving the Company’s data
and supporting documentation, FEMA
will notify the Company of the date that
FEMA will complete the transfer.
6. FEMA may allow the Company to
transfer all activities under this
Arrangement to one or more other WYO
companies. Prior to commencing such
transfer, the Company must submit, and
FEMA must approve, a formal request.
Such request must include the
following:
a. An assurance of uninterrupted
service to policyholders.
b. A detailed transfer plan providing
for either: (1) the renewal of the
Company’s NFIP policies by one or
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more other WYO companies; or (2) the
transfer of the Company’s NFIP policies
to one or more other WYO companies.
c. A description of who the
responsible party will be for liabilities
relating to losses incurred by the
Company in this or preceding
Arrangement years.
d. A point of contact within the
Company responsible for addressing
issues that may arise from the
Company’s previous participation under
the WYO Program.
7. FEMA will not reimburse the
Company for costs associated with the
transfer of activities under this
Arrangement to FEMA or another WYO
Company.
8. Failure to timely transfer data. The
Company agrees to hold FEMA harmless
for all costs, liabilities, and expenses,
including litigation expenses, incurred
due to the Company’s failure to timely
transfer the data and information
requested by FEMA or another WYO
Company.
E. Cancellation by FEMA.
1. FEMA may cancel financial
assistance and this Arrangement upon
thirty (30) calendar days written notice
to the Company stating one or more of
the following reasons for such
cancellation:
a. Fraud or misrepresentation by the
Company subsequent to the inception of
the Arrangement.
b. Nonpayment to FEMA of any
amount due.
c. Material failure to comply with the
requirements of this Arrangement or
with the written standards, procedures,
or guidance issued by FEMA relating to
the NFIP and applicable to the
Company.
d. Failure to maintain compliance
with WYO company participation
criteria at 44 CFR 62.24.
e. Any other cause so serious or
compelling a nature that affects the
Company’s present responsibility.
2. If FEMA cancels this Arrangement
pursuant to Article II.E.1, FEMA may
require the transfer of administrative
responsibilities and the transfer of data
and records as provided in Article II.D.4
and Article II.D.7–8. If transfer is
required, the Company must remit to
FEMA the unearned expenses retained
by the Company. In such event, FEMA
will assume all obligations and
liabilities owed to policyholders under
such policies, arising before and after
the date of transfer.
3. As an alternative to the transfer of
the policies to FEMA pursuant to
Article II.E.2, FEMA will consider a
proposal, if it is made by the Company,
for the assumption of responsibilities by
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another WYO company as provided in
Article II.D.6 and Article II.D.7–8.
F. The Company shall notify FEMA,
immediately, if:
1. An independent financial rating
company downgrades its financial
strength during its period of
performance under this Arrangement; or
2. It receives an order or directive
making it unable to carry out its
obligations under this Arrangement by
the insurance industry regulatory body
of any jurisdiction (e.g., Department of
Insurance or Commissioner or
Superintendent of Insurance) or court of
law to which the Company is subject,
including but not limited to being
placed in receivership or run-off status
by a State insurance regulatory body.
G. In the event that the Company is
unable or otherwise fails to carry out its
obligations under this Arrangement for
reasons set out in Article II.F.2:
1. The Company agrees to transfer,
and FEMA will accept, any and all
WYO policies issued by the Company
and in force as of the date of such
inability or failure to perform. In such
event FEMA will assume all obligations
and liabilities within the scope of the
Arrangement owed to policyholders
arising before and after the date of
transfer, and the Company will
immediately transfer to FEMA all
needed records and data, pursuant to
Article II.D.4 and Article II.D.7–8, and
all funds in its possession with respect
to all such policies transferred and the
unearned expenses retained by the
Company. As an alternative to the
transfer of the policies to FEMA, FEMA
will consider a proposal, if it is made by
the Company, for the assumption of
responsibilities under this Arrangement
by another WYO company as provided
by Article II.D.6 and Article II.D.7–8.
2. If there is ongoing litigation, the
Company must file a motion to stay the
proceedings on any and all pending
litigation within the scope of the
Arrangement, and FEMA or, if approved
by FEMA, another WYO company, will
assume full litigation responsibility.
H. In the event the Act is amended,
repealed, expires, or if FEMA is
otherwise without authority to continue
the Program, FEMA may cancel
financial assistance under this
Arrangement for any new or renewal
business, but the Arrangement will
continue for policies in force that shall
be allowed to run their term under the
Arrangement.
I. If FEMA does not publish the Fiscal
Year 2026 Arrangement in the Federal
Register on or before April 1, 2025, then
FEMA may require the continued
performance of all or selected elements
of this Arrangement through December
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31, 2026, but such extension may not
exceed the expiration of the six (6)
month period following publication of
the Fiscal Year 2026 Arrangement in the
Federal Register.
Article III. Undertakings of the
Company
A. Responsibilities of the Company.
1. Policy Issuance and Maintenance.
The Company must meet all
requirements of the Financial Control
Plan and any guidance issued by FEMA.
The Company is responsible for the
following:
a. Compliance with Rating
Procedures.
b. Eligibility Determinations.
c. Policy Issuances.
d. Policy Endorsements.
e. Policy Cancellations.
f. Policy Correspondence.
g. Payment of Agents’ Commissions.
h. Fund management, including the
receipt, recording, disbursement, and
timely deposit of NFIP funds.
2. The Company must provide a live
customer service agent that (1) is
accessible to all policyholders via
telephone during business days, and (2)
can resolve commonplace customer
service issues.
3. Claims Processing.
a. In general. The Company must
process all claims consistent with the
Standard Flood Insurance Policy,
Financial Control Plan, Claims Manual,
other guidance adopted by FEMA, and
as much as possible, with the
Company’s standard business practices
for its non-NFIP policies.
b. Adjuster registration. The Company
may not use an independent adjuster to
adjust a claim unless the independent
adjuster:
i. Holds a valid Flood Control Number
issued by FEMA; or
ii. Participates in the Flood Adjuster
Capacity Program.
c. Claim reinspections. The Company
must cooperate with any claim
reinspection by FEMA.
4. Reports. The Company must certify
its business under the WYO Program
through monthly financial reports in
accordance with the requirements of the
Pivot Use Procedures. The Company
must follow the Financial Control Plan
and the WYO Accounting Procedures
Manual. FEMA will validate and audit,
in detail, these data and compare the
results against Company reports.
5. Operations Plan. Within ninety (90)
calendar days of the commencement of
this Arrangement, the Company must
submit a written Operations Plan to
FEMA describing its efforts to perform
under this Arrangement. The plan must
include the following:
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a. Private Flood Insurance Separation
Plan. If applicable, a description of the
Company’s policies, procedures, and
practices separating their NFIP flood
insurance lines of business from their
non-NFIP flood insurance lines of
business, including its implementation
of Article III.F.
b. Marketing Plan. A marketing plan
describing the Company’s forecasted
growth, efforts to achieve that growth,
and ability to comply with any
marketing guidelines provided by
FEMA.
c. Policy Retention Plan. A retention
plan describing the Company’s efforts to
retain and renew policies and methods
of communicating with policyholders
on renewals.
d. Customer Service Plan. A
description of overall customer service
practices, including ongoing and
planned improvement efforts.
e. Distribution Plan. A description of
the Company’s NFIP flood insurance
distribution network, including
anticipated numbers of agents, efforts to
train those agents, and an average rate
of commissions paid to producers by
state.
f. Catastrophic Claims Handling Plan.
A catastrophic claims handling plan
describing how the Company will
respond and maintain service standards
in catastrophic flood events, including:
i. Deploying mobile or temporary
claims centers to provide immediate
policyholder assistance, including
submission of notice of loss and claim
status information.
ii. Preparing people, processes, and
tools for claims processing in remote
work scenarios.
iii. Preparing communications in
advance for readiness throughout the
year including a suite of printed and
digital materials (e.g., advertisements,
educational materials, social media
messaging, website blogs and
announcements) that provide key
messaging to stakeholders, including
policyholders, agents, and the public
following a catastrophic flood event.
iv. Identifying the core areas of
information technology that need to be
scaled pre-event or are scalable postevent.
v. Ensuring the availability of
sufficient adjusters and examiners to
handle sudden surge in claims filings
and handling.
g. Business Continuity Plan. A
business continuity plan identifying
threats and risks facing the Company’s
NFIP-related operations and how the
Company will maintain operations in
the event of a disaster affecting its
operational capabilities.
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h. Privacy Protection Plan. A privacy
protection plan that describes the
Company’s standards and required
procedures for using and maintaining
personally identifiable information, in
its possession and control or in the
possession or control of its vendors or
contractors.
i. System Security Plan. A system
security plan that describes system
boundaries, system environments of
operation, how security requirements
are implemented, and the relationships
with or connections to other systems,
including plans of action that describe
how unimplemented security
requirements will be met and how any
planned mitigations will be
implemented, prepared in accordance
with either:
i. National Institute of Standards and
Technology (NIST) Special Publication
(SP) 800–171 ‘‘Protecting Controlled
Unclassified Information in Nonfederal
Information Systems and
Organizations’’, Revision 2, https://
csrc.nist.gov/publications/detail/sp/800171/rev-2/final; or
ii. Another comparable standard
deemed acceptable by FEMA.
B. Time Standards. WYO companies
must meet the time standards provided
below. Time will be measured from the
date of receipt through the date the task
is completed. In addition to the
standards set forth below, all functions
performed by the Company must be in
accordance with the highest reasonably
attainable quality standards generally
used in the insurance and data
processing field. Applicable time
standards are:
1. Application Processing—fifteen
(15) business days (Note: if the policy
cannot be sent due to insufficient or
erroneous information or insufficient
funds, the Company must send a request
for correction or added moneys within
ten (10) business days).
2. Renewal processing—seven (7)
business days.
3. Endorsement processing—fifteen
(15) business days.
4. Cancellation processing—fifteen
(15) business days.
5. File examination—seven (7)
business days from the day the
Company receives the final report.
6. Claims draft processing—seven (7)
business days from completion of file
examination.
7. Claims adjustment—forty-five (45)
calendar days average from the receipt
of Notice of Loss (or equivalent) through
completion of examination.
8. Upload transactions to Pivot—one
(1) business day.
C. Policy Issuance.
PO 00000
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1. The flood insurance subject to this
Arrangement must be only that
insurance written by the Company in its
own name pursuant to the Act.
2. The Company must issue policies
under the regulations prescribed by
FEMA, in accordance with the Act, on
a form approved by FEMA.
3. The Company must issue all
policies in consideration of such
premiums and upon such terms and
conditions and in such states or areas or
subdivisions thereof as may be
designated by FEMA and only where
the Company is licensed by State law to
engage in the property insurance
business.
D. Installment Plans for Premium
Payments. During the term of the
Arrangement, FEMA may require the
Company to offer a monthly premium
installment payment option.
E. Lapse of Authority or
Appropriation. FEMA may require the
Company to discontinue issuing
policies subject to this Arrangement
immediately in the event Congressional
authorization or appropriation for the
NFIP lapses.
F. Separation of Finances and Other
Lines of Flood Insurance.
1. The Company must separate
Federal flood insurance funds from all
other Company accounts, at a bank or
banks of its choosing for the collection,
retention and disbursement of Federal
funds relating to its obligation under
this Arrangement, less the Company’s
expenses as set forth in Article IV. The
Company must remit all funds not
required to meet current expenditures to
the United States Treasury, in
accordance with the provisions of the
WYO Accounting Procedures Manual.
2. Other Undertakings of the
Company.
a. Clear communication. If the
Company also offers insurance policies
covering the peril of flood outside of the
NFIP in any geographic area in which
Program authorizes the purchase of
flood insurance, the Company must
ensure that all public communications
(whether written, recorded, electronic,
or other) regarding non-NFIP insurance
lines would not lead a reasonable
person to believe that the NFIP, FEMA,
or the Federal Government in any way
endorses, sponsors, oversees, regulates,
or otherwise has any connection with
the non-NFIP insurance line. The
Company may assure compliance with
this requirement by prominently
including in such communications the
following statement: ‘‘This insurance
product is not affiliated with the
National Flood Insurance Program.’’
b. Data protection. The Company may
not use non-public data, information, or
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resources obtained in course of
executing this Arrangement to further or
support any activities outside the scope
of this Arrangement.
G. Claims. The Company must
investigate, adjust, settle, and defend all
claims or losses arising from policies
issued under this Arrangement.
Payment of flood insurance claims by
the Company bind FEMA, subject to
appeal.
H. Compliance with Agency
Standards and Guidelines.
1. The Company must comply with
the Act, regulations, written standards,
procedures, and guidance issued by
FEMA relating to the NFIP and
applicable to the Company, including,
but not limited to the following:
a. WYO Program Financial Control
Plan.
b. Pivot Use Procedures.
c. NFIP Flood Insurance Manual.
d. NFIP Claims Manual.
e. NFIP Litigation Manual.
f. WYO Accounting Procedures
Manual.
g. WYO Company Bulletins.
2. The Company must market flood
insurance policies in a manner
consistent with marketing guidelines
established by FEMA.
3. FEMA may require the Company to
collect customer service information to
monitor and improve their program
delivery.
4. The Company must notify its agents
of the requirement to comply with State
regulations regarding flood insurance
agent education, notify agents of flood
insurance training opportunities, and
assist FEMA in periodic assessment of
agent training needs.
I. Compliance with Appeals Process.
1. In general. FEMA will notify the
Company when a policyholder files an
appeal. After notification, the Company
must provide FEMA the following
information:
a. All records created or maintained
pursuant to this Arrangement requested
by FEMA.
b. A comprehensive claim file
synopsis, redacted of personally
identifiable information, that includes a
summary of the appeal issues, the
Company’s position on each issue, and
any additional relevant information. If,
in the process of writing the synopsis,
the Company determines that it can
address the issue raised by the
policyholder on appeal without further
direction, it must notify FEMA. The
Company will then work directly with
the policyholder to achieve resolution
and update FEMA upon completion.
The Company may have a claims
examiner review the file who is
independent from the original decision
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and who possesses the authority to
overturn the original decision if the
facts support it.
2. Cooperation. The Company must
cooperate with FEMA throughout the
appeal process until final resolution.
This includes adhering to any written
appeals guidance issued by FEMA.
3. Resolution of Appeals. FEMA will
close an appeal when:
a. FEMA upholds the denial by the
Company.
b. FEMA overturns the denial by the
Company and all necessary actions that
follow are completed.
c. The Company independently
resolves the issue raised by the
policyholder without further direction.
d. The policyholder voluntarily
withdraws the appeal.
e. The policyholder files litigation.
4. Processing of Additional Payments
from Appeal. The Company must follow
established NFIP adjusting practices and
claim handling procedures for appeals
that result in additional payment to a
policyholder when FEMA does not
explicitly direct such payment during
the review of the appeal.
5. Time Standards.
a. Provide FEMA with requested files
pursuant to Article III.I.1.a—ten (10)
business days after request.
b. Provide FEMA with comprehensive
claim file synopsis pursuant to Article
III.I.1.b—ten (10) business days after
request.
c. Responding to inquiries from
FEMA regarding an appeal—ten (10)
business days after inquiry.
d. Inform FEMA of any litigation filed
by a policyholder with a current
appeal—ten (10) business days of
notice.
J. Subrogation.
1. In general. Consistent with Federal
law and guidance, the Company must
use its customary business practices
when pursuing subrogation.
2. Referral to FEMA. Pursuant to 44
CFR 62.23(i)(8), in lieu of the Company
pursuing a subrogation claim, WYO
companies may refer such claims to
FEMA.
3. Notification. No more than ten (10)
calendar days after either the Company
identifies a possible subrogation claim
or FEMA notifies the Company of a
possible subrogation claim, the
Company must notify FEMA of its
intent to pursue the claim or refer the
claim to FEMA.
4. Cooperation. Pursuant to 44 CFR
62.23(i)(11), the Company must extend
reasonable cooperation to FEMA’s
Office of the Chief Counsel on matters
related to subrogation.
K. Access to Records. The Company
must furnish to FEMA such summaries
PO 00000
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22425
and analysis of information including
claim file information and property
address, location, and/or site
information in its records as may be
necessary to carry out the purposes of
the Act, in such form as FEMA, in
cooperation with the Company, will
prescribe.
L. System for Award Management
(SAM). The Company must be registered
in the System for Award Management.
Such registration must have an active
status during the period of performance
under this Arrangement. The Company
must ensure that its SAM registration is
accurate and up to date.
M. Cybersecurity.
1. In general. Unless the Company
uses a compliance alternative pursuant
to Article III.M.2, the Company must
implement the security requirements
specified by National Institute of
Standards and Technology (NIST)
Special Publication (SP) 800–171
‘‘Protecting Controlled Unclassified
Information in Nonfederal Information
Systems and Organizations’’, Revision 2
(https://csrc.nist.gov/publications/
detail/sp/800-171/rev-2/final) for any
system that processes, stores, or
transmits information that requires
safeguarding or dissemination controls
pursuant to and consistent with law,
regulations, this Arrangement, or other
applicable requirements, including
information protected pursuant to
Article XII.C and personally identifiable
information of NFIP applicants and
policyholders. Such implementation
must be validated by a third-party
assessment organization.
2. Compliance alternatives. In lieu of
compliance with Article III.M.1, the
Company may either:
a. Provide FEMA with documentation
that the Company is securing the
systems subject to the requirements of
Article III.M.1 with either:
i. ISO/IEC 27001, https://www.iso.org/
isoiec-27001-information-security.html;
ii. NIST Cybersecurity Framework,
https://csrc.nist.gov/publications/detail/
sp/800-171/rev-2/final;
iii. Cybersecurity Maturity Model
Certification (CMMC 2.0), https://
dodcio.defense.gov/CMMC/;
iv. Service and Organization Controls
(SOC) 2, https://www.aicpa.org/
interestareas/frc/
assuranceadvisoryservices/
sorhome.html; or
v. Another comparable standard
deemed acceptable by FEMA.
b. Provide a plan of action that
describes how unimplemented security
requirements of NIST SP 800–171, rev.
2, (https://csrc.nist.gov/publications/
detail/sp/800-171/rev-2/final) will be
met and how any planned mitigations
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will be implemented as part of the
system security plan required under
Article III.A.5.i.
N. Company’s Service Providers. The
Company is required to ensure all its
vendors, independent adjusters and
contractors are acting consistently with
FEMA’s regulations, Arrangement and
NFIP guidance.
Article IV. Loss Costs, Expenses,
Expense Reimbursement, and Premium
Refunds
A. The Company is liable for
operating, administrative, and
production expenses, including any
State premium taxes, dividends, agents’
commissions or any other expense of
whatever nature incurred by the
Company in the performance of its
obligations under this Arrangement but
excluding other taxes or fees, such as
municipal or county premium taxes,
surcharges on flood insurance premium,
and guaranty fund assessments.
B. Payment for Selling and Servicing
Policies.
1. Operating and Administrative
Expenses. The Company may withhold,
as operating and administrative
expenses, other than agents’ or brokers’
commissions, an amount from the
Company’s written premium on the
policies covered by this Arrangement in
reimbursement of all of the Company’s
marketing, operating, and
administrative expenses, except for
allocated and unallocated loss
adjustment expenses described in
Article IV.C. This amount will equal the
sum of the average industry expenses
ratios for ‘‘Other Act.’’, ‘‘Gen. Exp.’’ And
‘‘Taxes’’ calculated by aggregating
premiums and expense amounts for
each of five property coverages using
direct premium and expense
information to derive weighted average
expense ratios. For this purpose, FEMA
will use data for the property/casualty
industry published, as of March 15 of
the prior Arrangement year, in Part III
of the Insurance Expense Exhibit in
A.M. Best Company’s Aggregates and
Averages for the following five property
coverages: Fire, Allied Lines,
Farmowners Multiple Peril,
Homeowners Multiple Peril, and
Commercial Multiple Peril (non-liability
portion).
2. Agent Compensation. The
Company may retain fifteen (15) percent
of the Company’s written premium on
the policies covered by this
Arrangement as the commission
allowance to meet the commissions or
salaries of insurance agents, brokers, or
other entities producing qualified flood
insurance applications and other related
expenses.
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3. Growth Bonus. FEMA may increase
the amount of expense allowance
retained by the Company depending on
the extent to which the Company meets
the marketing goals for the Arrangement
year contained in marketing guidelines
established pursuant to Article III.H.2.
The total growth bonuses paid to
companies pursuant to this
Arrangement may not exceed two (2)
percent of the aggregate net written
premium collected by all WYO
companies. FEMA will pay the
Company the amount of any increase
after the end of the Arrangement year.
C. FEMA will reimburse Loss
Adjustment Expenses as follows:
1. FEMA will reimburse unallocated
loss adjustment expenses to the
Company pursuant to a ‘‘ULAE
Schedule’’ coordinated with the
Company and provided by FEMA.
2. FEMA will reimburse allocated loss
adjustment expenses to the Company
pursuant to a ‘‘Fee Schedule’’
coordinated with the Company and
provided by FEMA. To ensure the
availability of qualified insurance
adjusters during catastrophic flood
events, FEMA may, in its sole
discretion, temporarily authorize the
use of an alternative Fee Schedule with
increased amounts during the term of
this Arrangement for losses incurred
during a time frame established by
FEMA.
3. FEMA will reimburse special
allocated loss expenses under 44 CFR
62.23(i)(9) and subrogation expenses
reimbursable under 44 CFR 62.23(i)(8)
to the Company in accordance with
guidelines issued by FEMA.
D. Loss Payments.
1. The Company must make loss
payments for flood insurance policies
from federal funds retained in the bank
account(s) established under Article
III.F.1 and, if such funds are depleted,
from Federal funds withdrawn from the
National Flood Insurance Fund
pursuant to Article V.
2. Loss payments include payments
because of awards, judgments for
damages or settlements that arise under
the scope of this Arrangement, and the
Authorities set forth herein. All such
loss payments and related expenses
must meet the documentation
requirements of the Financial Control
Plan and of this Arrangement, and the
Company must comply with the
litigation documentation and
notification requirements established by
FEMA. Failure to meet these
requirements may result in FEMA’s
decision not to provide reimbursement.
E. Litigation Oversight and
Reimbursable Litigation Expenses.
PO 00000
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1. Any litigation resulting from,
related to, or arising from the
Company’s compliance with the written
standards, procedures, and guidance
issued by FEMA arises under the
National Flood Insurance Act of 1968 or
regulations, and such legal issues raise
a Federal question.
2. The Company must conduct and
oversee litigation arising out of the
Company’s participation in the NFIP in
accordance with the National Flood
Insurance Program Litigation Manual.
When a specific issue is not addressed
by the National Flood Insurance
Program Litigation Manual, the
Company must consult with FEMA’s
WYO Oversight Team.
3. Limitation on Reimbursement and
Payment of Litigation Expenses and
Payment of Judgment and Award.
FEMA will not reimburse the Company,
in whole or part, for any award or
judgment for damages, and any costs to
defend litigation:
a. Involving issues of agent
negligence, errors or omissions;
b. Grounded in actions by the
Company that are significantly outside
the scope of this Arrangement,
including, but not limited to, reckless
disregard of the Company’s duties under
the Arrangement, regulations or FEMA’s
written standards, procedures or
guidance relating to the NFIP;
c. Involving the submittal of
inaccurate, false or fraudulent requests
for litigation expense reimbursement;
d. Where the Company failed to
comply with the requirements of the
NFIP Litigation Manual;
e. Incurred after the Company became
unable or otherwise failed to carry out
its obligations under this Arrangement
for the reasons contained in Article
II.F.2, except that FEMA will reimburse
the Company for reasonable costs of
filing motions to stay proceedings; or
f. When FEMA and the Company’s
interests diverge, including positions on
litigation strategy and settlement.
F. Refunds. The Company must make
premium refunds required by FEMA to
applicants and policyholders from
Federal flood insurance funds referred
to in Article III.F.1, and, if such funds
are depleted, from funds derived by
withdrawing from the National Flood
Insurance Fund pursuant to Article V.
The Company may not refund any
premium from Federal flood insurance
funds to applicants or policyholders in
any manner other than as specified by
FEMA since flood insurance premiums
are funds of the Federal Government.
G. Suspension and Debarment.
1. In general. The Company may not
contract with or employ any person who
is suspended or debarred from
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participating in federal transactions
pursuant to 2 CFR part 180 (covering
federal nonprocurement transactions) or
48 CFR part 9, subpart 9.4 (covering
federal procurement transactions) in
relation to this Arrangement.
2. Reimbursement. FEMA will not
reimburse the company for any
expenses incurred in violation of Article
IV.G.1.
3. Compliance. The Company may
ensure compliance with Article IV.G.1
by:
a. Checking the System for Awards
Management at sam.gov;
b. Collecting a certification from that
person; or
c. Adding a clause or condition to the
transaction with that person.
Article V. Undertakings of the
Government
A. FEMA must enable the Company to
withdraw funds from the National Flood
Insurance Fund daily, if needed,
pursuant to prescribed procedures
implemented by FEMA. FEMA will
increase the amounts of the
authorizations as necessary to meet the
obligations of the Company under
Article IV.C–F. The Company may only
request funds when net premium
income has been depleted. The timing
and amount of cash advances must be
as close as is administratively feasible to
the actual disbursements by the
recipient organization for allowable
expenses. Request for payment may not
ordinarily be drawn more frequently
than daily. The Company may withdraw
funds from the National Flood
Insurance Fund for any of the following
reasons:
1. Payment of claims, as described in
Article IV.D.
2. Refunds to applicants and
policyholders for insurance premium
overpayment, or if the application for
insurance is rejected or when
cancellation or endorsement of a policy
results in a premium refund, as
described in Article IV.F.
3. Allocated and unallocated loss
adjustment expenses, as described in
Article IV.C.
B. FEMA must provide technical
assistance to the Company as follows:
1. NFIP policy and history.
2. Clarification of underwriting,
coverage, and claims handling.
3. Other assistance as needed.
C. FEMA must provide the Company
with a copy of all formal written appeal
decisions conducted in accordance with
Section 205 of the Bunning-BereuterBlumenauer Flood Insurance Reform
Act of 2004, Public Law 108–264 and 44
CFR 62.20.
D. Prior to the end of the Arrangement
period, FEMA may provide the
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Company a statistical summary of their
performance during the signed
Arrangement period. This summary will
detail the Company’s performance
individually, as well as compare the
Company’s performance to the aggregate
performance of all WYO companies and
the NFIP Direct Servicing Agent.
Article VI. Cash Management and
Accounting
A. FEMA must make available to the
Company during the entire term of this
Arrangement the ability to withdraw
funds from the National Flood
Insurance Fund provided for in Article
V. The Company may withdraw funds
from the National Flood Insurance Fund
for reimbursement of its expenses as set
forth in Article V. A that exceed net
written premiums collected by the
Company from the effective date of this
Arrangement or continuation period to
the date of the draw. In the event that
adequate funding is not available to
meet current Company obligations for
flood policy claim payments issued,
FEMA must direct the Company to
immediately suspend the issuance of
loss payments until such time as
adequate funds are available. The
Company is not required to pay claims
from their own funds in the event of
such suspension.
B. The Company must remit all funds,
including interest, not required to meet
current expenditures to the United
States Treasury, in accordance with the
provisions of the WYO Accounting
Procedures Manual or procedures
approved in writing by FEMA.
C. In the event the Company elects
not to participate in the Program in this
or any subsequent fiscal year, or is
otherwise unable or not permitted to
participate, the Company and FEMA
must make a provisional settlement of
all amounts due or owing within three
(3) months of the expiration or
termination of this Arrangement. This
settlement must include net premiums
collected, funds withdrawn from the
National Flood Insurance Fund, and
reserves for outstanding claims. The
Company and FEMA agree to make a
final settlement of accounts for all
obligations arising from this
Arrangement within forty-eight (48)
months, which may be extended for
good cause and subject to audit, of its
expiration or termination, except for
contingent liabilities that must be listed
by the Company. At the time of final
settlement, the balance, if any, due
FEMA or the Company must be remitted
by the other immediately and the
operating year under this Arrangement
must be closed.
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D. Upon FEMA’s request, the
Company must provide FEMA with a
true and correct copy of the Company’s
Fire and Casualty Annual Statement,
and Insurance Expense Exhibit or
amendments thereof as filed with the
State Insurance Authority of the
Company’s domiciliary State.
E. The Company must comply with
the requirements of the False Claims Act
(41 U.S.C. 3729–3733), which prohibits
submission of false or fraudulent claims
for payment to the Federal Government.
Article VII. Arbitration
If any misunderstanding or dispute
arises between the Company and FEMA
with reference to any factual issue
under any provisions of this
Arrangement or with respect to FEMA’s
nonrenewal of the Company’s
participation, other than as to legal
liability under or interpretation of the
Standard Flood Insurance Policy, such
misunderstanding or dispute may be
submitted to arbitration for a
determination that will be binding upon
approval by FEMA. The Company and
FEMA may agree on and appoint an
arbitrator who will investigate the
subject of the misunderstanding or
dispute and make a determination. If the
Company and FEMA cannot agree on
the appointment of an arbitrator, then
two arbitrators will be appointed, one to
be chosen by the Company and one by
FEMA.
The two arbitrators so chosen, if they
are unable to reach an agreement, must
select a third arbitrator who must act as
umpire, and such umpire’s
determination will become final only
upon approval by FEMA. The Company
and FEMA shall bear in equal shares all
expenses of the arbitration. Findings,
proposed awards, and determinations
resulting from arbitration proceedings
carried out under this section, upon
objection by FEMA or the Company,
shall be inadmissible as evidence in any
subsequent proceedings in any court of
competent jurisdiction.
This Article shall indefinitely succeed
the term of this Arrangement.
Article VIII. Errors and Omissions
A. In the event of negligence by the
Company that has not resulted in
litigation but has resulted in a claim
against the Company, FEMA will not
consider reimbursement of the
Company for costs incurred due to that
negligence unless the Company takes all
reasonable actions to rectify the
negligence and to mitigate any such
costs as soon as possible after discovery
of the negligence. The Company may
choose not to seek reimbursement from
FEMA.
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B. If the Company has made a claim
payment to an insured without
including a mortgagee (or trustee) of
which the Company had actual notice
prior to making payment, and
subsequently determines that the
mortgagee (or trustee) is also entitled to
any part of said claim payment, any
additional payment may not be paid by
the Company from any portion of the
premium and any funds derived from
any Federal funds deposited in the bank
account described in Article III.F.1. In
addition, the Company agrees to hold
the Federal Government harmless
against any claim asserted against the
Federal Government by any such
mortgagee (or trustee), as described in
the preceding sentence, by reason of any
claim payment made to any insured
under the circumstances described
above.
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Article IX. Officials Not To Benefit
No Member or Delegate to Congress,
or Resident Commissioner, may be
admitted to any share or part of this
Arrangement, or to any benefit that may
arise therefrom; but this provision may
not be construed to extend to this
Arrangement if made with a corporation
for its general benefit.
Article X. Offset
At the settlement of accounts, the
Company and FEMA have, and may
exercise, the right to offset any balance
or balances, whether on account of
premiums, commissions, losses, loss
adjustment expenses, salvage, or
otherwise due one party to the other, its
successors or assigns, hereunder or
under any other Arrangements
heretofore or hereafter entered into
between the Company and FEMA. This
right of offset shall not be affected or
diminished because of insolvency of the
Company.
All debts or credits of the same class,
whether liquidated or unliquidated, in
favor of or against either party to this
Arrangement on the date of entry, or any
order of conservation, receivership, or
liquidation, shall be deemed to be
mutual debts and credits and shall be
offset with the balance only to be
allowed or paid. No offset shall be
allowed where a conservator, receiver,
or liquidator has been appointed and
where an obligation was purchased by
or transferred to a party hereunder to be
used as an offset.
Although a claim on the part of either
party against the other may be
unliquidated or undetermined in
amount on the date of the entry of the
order, such claim will be regarded as
being in existence as of the date of such
order and any credits or claims of the
VerDate Sep<11>2014
17:17 Mar 29, 2024
Jkt 262001
same class then in existence and held by
the other party may be offset against it.
Article XI. Equal Opportunity
A. Age Discrimination Act of 1975.
The Company must comply with the
requirements of the Age Discrimination
Act of 1975, Public Law 94–135 (42
U.S.C. 6101 et seq.) which prohibits
discrimination on the basis of age in any
program or activity receiving federal
financial assistance.
B. Americans with Disabilities Act.
The Company must comply with the
requirements of Titles I, II, and III of the
Americans with Disabilities Act, Public
Law 101–336 (42 U.S.C. 12101–12213),
which prohibits recipients from
discriminating on the basis of disability
in the operation of public entities,
public and private transportation
systems, places of public
accommodation, and certain testing
entities.
C. Civil Rights Act of 1964—Title VI.
The Company must comply with the
requirements of Title VI of the Civil
Rights Act of 1964 (42 U.S.C. 2000d et
seq.), which provides that no person in
the United States will, on the grounds
of race, color, or national origin, be
excluded from participation in, be
denied the benefits of, or be subjected
to discrimination under any program or
activity receiving federal financial
assistance. Department of Homeland
Security implementing regulations for
the Act are found at 6 CFR part 21 and
44 CFR part 7.
D. Civil Rights Act of 1968. The
Company must comply with Title VIII of
the Civil Rights Act of 1968, which
prohibits recipients from discriminating
in the sale, rental, financing, and
advertising of dwellings, or in the
provision of services in connection
therewith, on the basis of race, color,
national origin, religion, disability,
familial status, and sex as implemented
by the U.S. Department of Housing and
Urban Development at 24 CFR part 100.
E. Rehabilitation Act of 1973. The
Company must comply with the
requirements of Section 504 of the
Rehabilitation Act of 1973 (29 U.S.C.
794), which provides that no otherwise
qualified handicapped individuals in
the United States will, solely by reason
of the handicap, be excluded from
participation in, be denied the benefits
of, or be subjected to discrimination
under any program or activity receiving
federal financial assistance.
Article XII. Access to Books and
Records
A. FEMA, the Department of
Homeland Security, and the
Comptroller General of the United
PO 00000
Frm 00057
Fmt 4703
Sfmt 4703
States, or their duly authorized
representatives, for the purpose of
investigation, audit, examination, and to
enable FEMA to carry out the NFIP shall
have access to any books, documents,
papers and records of the Company that
are pertinent to this Arrangement. The
Company shall keep records that fully
disclose all matters pertinent to this
Arrangement, including premiums and
claims paid or payable under policies
issued pursuant to this Arrangement.
Records of accounts and records relating
to financial assistance shall be retained
and available for three (3) years after
final settlement of accounts, and to
financial assistance, three (3) years after
final adjustment of such claims. FEMA
shall have access to policyholder and
claim records at all times for purposes
of the review, defense, examination,
adjustment, or investigation of any
claim under a flood insurance policy
subject to this Arrangement.
B. Nondisclosure by FEMA. FEMA, to
the extent permitted by law and
regulation, will safeguard and treat
information submitted or made
available by the Company pursuant to
this Arrangement as confidential where
the information has been marked
‘‘confidential’’ by the Company and the
Company customarily keeps such
information private or closely-held. To
the extent permitted by law and
regulation, FEMA will not release such
information to the public pursuant to a
Freedom of Information Act (FOIA)
request, 5 U.S.C. 552, without prior
notification to the Company. FEMA may
transfer documents provided by the
Company to any department or agency
within the Executive Branch or to either
house of Congress if the information
relates to matters within the
organization’s jurisdiction. FEMA may
also release the information submitted
pursuant to a judicial order from a court
of competent jurisdiction.
C. Nondisclosure by Company.
1. In general. The Company, to the
extent permitted by law, must safeguard
and treat information submitted or made
available by FEMA pursuant to this
Arrangement as confidential where the
information has been marked or
identified as ‘‘confidential’’ by FEMA
and FEMA customarily keeps such
information private or closely-held. The
Company may not disclose such
confidential information to a third-party
without the express written consent of
FEMA or as otherwise required by law.
2. Other protections. Article XII.C.1
shall not be construed as to limit the
effect of any other requirement on the
Company to protect information from
disclosure, including a joint defense
agreement or under the Privacy Act.
E:\FR\FM\01APN1.SGM
01APN1
Federal Register / Vol. 89, No. 63 / Monday, April 1, 2024 / Notices
Article XIII. Compliance With Act and
Regulations
This Arrangement and all policies of
insurance issued pursuant thereto are
subject to Federal law and regulations.
ACTION:
David I. Maurstad,
Assistant Administrator for Federal Insurance
Directorate, Resilience, Federal Emergency
Management Agency.
BILLING CODE 9111–52–P
DEPARTMENT OF HOMELAND
SECURITY
Federal Emergency Management
Agency
[Docket ID FEMA–2024–0002]
Final Flood Hazard Determinations
Federal Emergency
Management Agency, Department of
Homeland Security.
AGENCY:
Flood hazard determinations,
which may include additions or
modifications of Base Flood Elevations
(BFEs), base flood depths, Special Flood
Hazard Area (SFHA) boundaries or zone
designations, or regulatory floodways on
the Flood Insurance Rate Maps (FIRMs)
and where applicable, in the supporting
Flood Insurance Study (FIS) reports
have been made final for the
communities listed in the table below.
The FIRM and FIS report are the basis
of the floodplain management measures
that a community is required either to
adopt or to show evidence of having in
effect in order to qualify or remain
qualified for participation in the Federal
Emergency Management Agency’s
(FEMA’s) National Flood Insurance
Program (NFIP).
DATES: The date of July 31, 2024 has
been established for the FIRM and,
where applicable, the supporting FIS
report showing the new or modified
flood hazard information for each
community.
SUMMARY:
Article XV. Relationship Between the
Parties and the Insured
Inasmuch as the Federal Government
is a guarantor hereunder, the primary
relationship between the Company and
the Federal Government is one of a
fiduciary nature, that is, to ensure that
any taxpayer funds are accounted for
and appropriately expended. The
Company is a fiscal agent of the Federal
Government, but is not a general agent
of the Federal Government. The
Company is solely responsible for its
obligations to its insured under any
policy issued pursuant hereto, such that
the Federal Government is not a proper
party to any lawsuit arising out of such
policies.
Authority: 42 U.S.C. 4071, 4081; 44
CFR 62.23.
[FR Doc. 2024–06805 Filed 3–29–24; 8:45 am]
Notice.
The FIRM, and if
applicable, the FIS report containing the
final flood hazard information for each
community is available for inspection at
the respective Community Map
Repository address listed in the tables
below and will be available online
through the FEMA Map Service Center
at https://msc.fema.gov by the date
indicated above.
FOR FURTHER INFORMATION CONTACT: Rick
Sacbibit, Chief, Engineering Services
Branch, Federal Insurance and
Mitigation Administration, FEMA, 400
C Street SW, Washington, DC 20472,
(202) 646–7659, or (email)
patrick.sacbibit@fema.dhs.gov; or visit
ADDRESSES:
Community
22429
the FEMA Mapping and Insurance
eXchange (FMIX) online at https://
www.floodmaps.fema.gov/fhm/fmx_
main.html.
The
Federal Emergency Management Agency
(FEMA) makes the final determinations
listed below for the new or modified
flood hazard information for each
community listed. Notification of these
changes has been published in
newspapers of local circulation and 90
days have elapsed since that
publication. The Deputy Associate
Administrator for Insurance and
Mitigation has resolved any appeals
resulting from this notification.
This final notice is issued in
accordance with section 110 of the
Flood Disaster Protection Act of 1973,
42 U.S.C. 4104, and 44 CFR part 67.
FEMA has developed criteria for
floodplain management in floodprone
areas in accordance with 44 CFR part
60.
Interested lessees and owners of real
property are encouraged to review the
new or revised FIRM and FIS report
available at the address cited below for
each community or online through the
FEMA Map Service Center at https://
msc.fema.gov.
The flood hazard determinations are
made final in the watersheds and/or
communities listed in the table below.
SUPPLEMENTARY INFORMATION:
(Catalog of Federal Domestic Assistance No.
97.022, ‘‘Flood Insurance.’’)
Nicholas A. Shufro,
Deputy Assistant Administrator for Risk
Management, Federal Emergency
Management Agency, Department of
Homeland Security.
Community map repository address
Sonoma County, California and Incorporated Areas
Docket No.: FEMA–B–2328
City of Santa Rosa ...................................................................................
Town of Windsor ......................................................................................
Unincorporated Areas of Sonoma County ...............................................
Engineering Division, City Hall, 100 Santa Rosa Avenue, Santa Rosa,
CA 95404.
Civic Center, Building 400, 9291 Old Redwood Highway, Windsor, CA
95492.
Sonoma County Permit & Resource Management, 2550 Ventura Avenue, Santa Rosa, CA 95403.
ddrumheller on DSK120RN23PROD with NOTICES1
Broward County, Florida and Incorporated Areas
Docket No.: FEMA–B–2163
City of Coconut Creek ..............................................................................
City of Cooper City ...................................................................................
City of Dania Beach .................................................................................
City of Deerfield Beach ............................................................................
City of Fort Lauderdale .............................................................................
VerDate Sep<11>2014
17:17 Mar 29, 2024
Jkt 262001
PO 00000
Frm 00058
Fmt 4703
Utilities and Engineering Building, 5295 Johnson Road, Coconut Creek,
FL 33073.
Building Department, 9090 Southwest 50th Place, Cooper City, FL
33328.
City Hall, 100 West Dania Beach Boulevard, Dania Beach, FL 33004.
Engineering Department, 200 Goolsby Boulevard, Deerfield Beach, FL
33442.
Department of Sustainable Development, 700 Northwest 19th Avenue,
Fort Lauderdale, FL 33311.
Sfmt 4703
E:\FR\FM\01APN1.SGM
01APN1
Agencies
[Federal Register Volume 89, Number 63 (Monday, April 1, 2024)]
[Notices]
[Pages 22420-22429]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06805]
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
Federal Emergency Management Agency
[Docket ID FEMA-2024-0014]
National Flood Insurance Program (NFIP); Assistance to Private
Sector Property Insurers, Notice of Fiscal Year (FY) 2025 Arrangement
AGENCY: Federal Emergency Management Agency, Department of Homeland
Security.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Federal Emergency Management Agency announces the Fiscal
Year 2025 Financial Assistance/Subsidy Arrangement for private property
insurers interested in participating in the National Flood Insurance
Program's Write Your Own Program.
DATES: Interested insurers must submit intent to subscribe or re-
subscribe to the Arrangement by July 1, 2024.
FOR FURTHER INFORMATION CONTACT: Karolyn Kiss, Federal Insurance
Directorate (FID), Resilience FEMA, 400 C St. SW, Washington, DC 20472
(mail); (202) 646-3140 (phone); or [email protected] (email).
SUPPLEMENTARY INFORMATION:
I. Background
The National Flood Insurance Act of 1968 (NFIA) (42 U.S.C. 4001 et
seq.) authorizes the Administrator of the Federal Emergency Management
Agency (FEMA) to establish and carry out a National Flood Insurance
Program (NFIP) to enable interested persons to purchase flood
insurance. See 42 U.S.C. 4011(a). Under the NFIA, FEMA may use
insurance companies and other insurers, insurance agents and brokers,
and insurance adjustment organizations as fiscal agents of the United
States to help it carry out the NFIP. See 42 U.S.C. 4071. To this end,
FEMA may ``enter into any contracts, agreements, or other appropriate
arrangements'' with private insurance companies to use their facilities
and services in administering the NFIP on such terms and conditions as
they agree upon. See 42 U.S.C. 4081(a).
Pursuant to this authority, FEMA enters into a standard Financial
Assistance/Subsidy Arrangement (Arrangement) with private sector
property insurers, also known as Write Your Own (WYO) companies, to
sell NFIP flood insurance policies under their own names and adjust and
pay claims arising under the Standard Flood Insurance Policy (SFIP).
Each Arrangement entered into by a WYO company must be in the form and
substance of the standard Arrangement, a copy of which is published in
the
[[Page 22421]]
Federal Register annually, at least 6 months prior to becoming
effective. See 44 CFR 62.23(a). To learn more about FEMA's WYO Program,
please visit https://nfipservices.floodsmart.gov/write-your-own-program.
II. Notice of Availability
Insurers interested in participating in the WYO Program for Fiscal
Year 2025 must contact Karolyn Kiss at [email protected] by
July 1, 2024.
Prior participation in the WYO Program does not guarantee FEMA will
approve continued participation. FEMA will evaluate requests to
participate in light of publicly available information, industry
performance data, and other criteria listed in 44 CFR 62.24 and the FY
2025 Arrangement, copied below. FEMA encourages private insurance
companies to supplement this information with customer satisfaction
surveys, industry awards or recognition, or other objective performance
data. In addition, private insurance companies should work with their
vendors and other service providers involved in servicing and
delivering their insurance lines to ensure FEMA receives the
information necessary to effectively evaluate the criteria set forth in
its regulations.
FEMA will send a copy of the offer for the FY 2025 Arrangement,
together with related materials and submission instructions, to all
private insurance companies successfully evaluated by the NFIP. If
FEMA, after conducting its evaluation, chooses not to renew a Company's
participation, FEMA, at its option, may require the continued
performance of all or selected elements of the FY 2024 Arrangement for
a period required for orderly transfer or cessation of the business and
settlement of accounts, not to exceed 18 months. See FY 2024
Arrangement, Article II.D. All evaluations, whether successful or
unsuccessful, will inform both an overall assessment of the WYO Program
and any potential changes FEMA may consider regarding the Arrangement
in future fiscal years.
Any private insurance company with questions may contact FEMA at:
Karolyn Kiss, Federal Insurance Directorate, Resilience, FEMA, 400 C
St. SW, Washington, DC 20472 (mail); (202) 646-3140 (phone); or
[email protected] (email).
III. Fiscal Year 2025 Arrangement
Pursuant to 44 CFR 62.23(a), FEMA must publish the Arrangement at
least six months prior to the Arrangement becoming effective. The FY
2025 Arrangement provided below is substantially similar to the
previous year's Arrangement, but includes the following changes:
1. In Article I.A, FEMA is clarifying that the Arrangement is
between FEMA and the Company.
2. In Article II.B, FEMA is removing ``or not re-subscribe,''
because it is addressed in Article II.D, as revised.
3. In Article II.D, FEMA is adding a title and redesignating the
whole Article in subparagraphs II.D.1 through II.D.8 for clarity.
4. In newly-designated Article II.D.1, FEMA is removing ``in
addition to the requirements of Article II.B, in order to,'' because
the time requirements appeared to conflict with the requirements to
notify. FEMA resolved the conflicting timelines by clarifying that the
Company must notify FEMA of their intent to not resubscribe to the WYO
Program within thirty (30) calendar days from their decision, ``but no
later than ninety (90) calendar days from the publication in the
Federal Register'' for the next fiscal year.
5. In newly-designated Article II.D.2, FEMA is adding this
subparagraph to capture the situation where a Company elects to no
longer continue selling or renewing NFIP policies in a particular
state, territory, area or subdivision, while remaining in the WYO
Program.
6. In newly-designated Article II.D.3, FEMA is adding the words
``in whole or in part'' regarding the transfer of activities to capture
the situation when the Company decides to stop selling or renewing in a
particular community. FEMA also increased the period that FEMA may, at
its option, require for orderly transfer and settlement of accounts
from eighteen (18) months to forty-eight (48) months.
7. FEMA is adding two (2) additional subparagraphs in Article II.D
(II.D.7 and II.D.8), reiterating that FEMA will not reimburse for costs
associated with the transfer of activities and that the Company will
hold FEMA harmless for the Company's failure to timely transfer data
and information.
8. For clarity and alignment with subparagraph II.E.2, in Article
II.E, FEMA is removing ``under'' and ``in its entirety'' in
subparagraph II.E.1 and clarifying that FEMA can cancel financial
assistance ``and'' this Arrangement for any of the reasons stated
therein. FEMA is also updating citations to subparagraphs II.E.2 and
II.E.3 in the Arrangement to align with subparagraph redesignations.
9. In Article II.F, FEMA is moving the first three (3) sentences
relating to receivership or run-off status and redesignating them in a
new Article II.G, as revised, without material change to the remaining
provisions relating to the Company's financial health notice
requirements. Only minor edits are made to reflect the fact that some
states do not have a ``State Department of Insurance,'' by inserting
more general terms and providing some examples.
10. In newly-designated Article II.G, FEMA is removing repetitive
language by citing to the language in Article II.F.2 (the Company
receives an order or directive making it unable to carry out its
obligations under this Arrangement by the insurance industry regulatory
body), and adding a new requirement in newly-added subparagraphs
II.G.2. In II.G.2, FEMA is requiring that if a Company is subject to
II.F.2, the Company must file a motion to stay the proceedings on any
and all pending litigation.
11. FEMA is redesignating the remaining two (2) subparagraphs in
Article II as II.H. and II.I.
12. In Article III.A.5.f, FEMA is adding a new requirement to the
Catastrophic Claims Handling Plan explaining the Company's ability to
maintain sufficient adjuster and examiner resources during a
catastrophic event.
13. In Article III.A.5.h., FEMA is adding ``and required
procedures'' and ``in its possession and control or in the possession
and control of its vendors or contractors'' to obtain additional
information from the Company on its Privacy Protection Plan standards
and process for using and maintaining personally identifiable
information.
14. In Article III, FEMA is adding a new subparagraph III.D.
requiring a monthly premium payment option for policyholders should
FEMA implement such an option during the Arrangement term. FEMA is
redesignating the remaining subparagraphs as III. E. through M and
adding a new subparagraph III.N.
15. In the new Article III.N, FEMA is adding an additional
provision on ``Company's Service Providers'' to ensure the Company
conducts appropriate oversight of its vendors, agents, independent
adjusters and contractors.
16. In Article IV.C.3, FEMA is adding a citation for special
allocated loss adjustment expenses.
17. In Article IV.D.2, FEMA is removing ``litigation'' and
inserting ``awards, judgments for damages or settlements'' because
litigation expenses are paid as special allocated loss adjustment
expenses.
18. FEMA is redesignating Article IV.D.3 as Article IV.E under a
new title, ``Litigation Oversight and Reimbursable Expenses.''
[[Page 22422]]
19. In newly-redesignated Article IV.E.2, FEMA is deleting ``the
Company should utilize its customary business practices for its defense
of property and casualty litigation, including billing rates and
standards'' and is adding ``the Company must consult with FEMA's WYO
Oversight Team'' to assist FEMA in better overseeing WYO NFIP
litigation expenses.
20. In newly-redesignated Article IV.E.3, FEMA reorganized existing
subparagraphs from Article IV.D.3 and added language to clarify when
and how FEMA will reimburse the Company for awards, judgments for
damages and any costs to defend litigation.
21. In Article VI.C, FEMA is increasing the term for final
settlement of accounts from eighteen (18) months to forty-eight (48)
months to enable additional time for orderly settlement of accounts and
to accommodate similar changes in Art. II.D.3. Additionally, the
language ``subject to audit'' is moved to clarify the need of an audit
of the final settlement and all of the Company's obligations it
encompasses.
22. In Article XII.A., FEMA is deleting the subtitle ``Audits'' and
adding ``and to enable FEMA to carry out the NFIP'' to clarify that
FEMA may need to access these documents for reasons other than audits.
The Fiscal Year 2025 Arrangement reads as follows:
Financial Assistance/Subsidy Arrangement
Article I. General Provisions
A. Parties. The parties to the Financial Assistance/Subsidy
Arrangement are the Federal Emergency Management Agency (FEMA) and the
Company. This Arrangement is solely between FEMA and the Company, and
in no instance shall any of the Company's service providers (as defined
at III.N) have any rights under this Arrangement.
B. Purpose. The purpose of this Financial Assistance/Subsidy
Arrangement is to authorize the Company to sell and service flood
insurance policies made available through the National Flood Insurance
Program (NFIP) and adjust and pay claims arising under such policies as
fiscal agents of the Federal Government.
C. Authority. This Financial Assistance/Subsidy Arrangement is
authorized under the National Flood Insurance Act of 1968 (NFIA) (42
U.S.C. 4001 et seq.), and in particular, section 1345(a) of the NFIA
(42 U.S.C. 4081(a)), as implemented by 44 CFR 62.23 and 62.24.
Article II. Commencement and Termination
A. The effective period of this Arrangement begins on October 1,
2024, and terminates no earlier than September 30, 2025, subject to
extension pursuant to Articles II.D and II.I. FEMA may provide
financial assistance only for policy applications, renewals, and
endorsements accepted by the Company during this period pursuant to the
Program's effective date, underwriting, and eligibility rules.
B. Pursuant to 44 CFR 62.23(a), FEMA will publish the Arrangement
and the terms for subscription or re-subscription for Fiscal Year 2026
in the Federal Register no later than April 1, 2025. Within ninety (90)
calendar days of such publication, the Company must notify FEMA of its
intent to re-subscribe to the WYO Program for the following term.
C. Requesting Participation in WYO Program. Insurers interested in
participating in the WYO Program, that have never participated or are
returning to the Program after a period of non-participation, must
submit a written request to participate.
1. Participation is then contingent on submission of both:
a. A completed application package, the requirements and contents
of which FEMA will outline in its written response to the request to
participate.
b. A completed operations plan, whose requirements and contents are
outlined at Article III.A.5 of this Arrangement.
2. Insurers who are already participating in the program must
submit their operations plan within ninety (90) calendar days as
outlined in Article III.A.5 of this Arrangement.
D. Uninterrupted Service to Policyholders and Transfer of Data and
Records.
1. To ensure uninterrupted service to policyholders, the Company
must notify FEMA within thirty (30) calendar days from when the Company
elects not to re-subscribe to the WYO Program during the term of this
Arrangement, but no later than ninety (90) calendar days from the
publication in the Federal Register of the Fiscal Year 2026
Arrangement.
2. The Company must notify FEMA as soon as possible, but no later
than thirty (30) calendar days from when the Company elects to no
longer sell or renew NFIP policies in a community as defined in 44 CFR
59.1.
3. If so notified under Article II.D.1 or II.D.2, or if FEMA
chooses not to renew the Company's participation, FEMA, at its option,
may require the continued performance of all or selected elements of
this Arrangement for the period required for orderly transfer or
cessation of business and settlement of accounts, not to exceed forty-
eight (48) months after the end of this Arrangement (September 30,
2025), and may either require transfer of activities, in whole or in
part, to FEMA under Article II.D.4 or allow transfer of activities, in
whole or in part, to another WYO company under Article II.D.6.
4. FEMA may require the Company to transfer all activities under
this Arrangement to FEMA. Within thirty (30) calendar days of FEMA's
election of this option, the Company must deliver to FEMA the
following:
a. A plan for the orderly transfer to FEMA of any continuing
responsibilities in administering the policies issued by the Company
under the Program including provisions for coordination assistance.
b. All data received, produced, and maintained through the life of
the Company's participation in the Program, including certain data, as
determined by FEMA, in a standard format and medium.
c. All claims and policy files, including those pertaining to
receipts and disbursements that have occurred during the life of each
policy. In the event of a transfer of the services provided, the
Company must provide FEMA with a report showing, on a policy basis, any
amounts due from or payable to policyholders, agents, brokers, and
others as of the transition date.
d. All funds in its possession with respect to any policies
transferred to FEMA for administration and the unearned expenses
retained by the Company.
e. A point of contact within the Company responsible for addressing
issues that may arise from the Company's previous participation under
the WYO Program.
5. Within ninety (90) calendar days of FEMA receiving the Company's
data and supporting documentation, FEMA will notify the Company of the
date that FEMA will complete the transfer.
6. FEMA may allow the Company to transfer all activities under this
Arrangement to one or more other WYO companies. Prior to commencing
such transfer, the Company must submit, and FEMA must approve, a formal
request. Such request must include the following:
a. An assurance of uninterrupted service to policyholders.
b. A detailed transfer plan providing for either: (1) the renewal
of the Company's NFIP policies by one or
[[Page 22423]]
more other WYO companies; or (2) the transfer of the Company's NFIP
policies to one or more other WYO companies.
c. A description of who the responsible party will be for
liabilities relating to losses incurred by the Company in this or
preceding Arrangement years.
d. A point of contact within the Company responsible for addressing
issues that may arise from the Company's previous participation under
the WYO Program.
7. FEMA will not reimburse the Company for costs associated with
the transfer of activities under this Arrangement to FEMA or another
WYO Company.
8. Failure to timely transfer data. The Company agrees to hold FEMA
harmless for all costs, liabilities, and expenses, including litigation
expenses, incurred due to the Company's failure to timely transfer the
data and information requested by FEMA or another WYO Company.
E. Cancellation by FEMA.
1. FEMA may cancel financial assistance and this Arrangement upon
thirty (30) calendar days written notice to the Company stating one or
more of the following reasons for such cancellation:
a. Fraud or misrepresentation by the Company subsequent to the
inception of the Arrangement.
b. Nonpayment to FEMA of any amount due.
c. Material failure to comply with the requirements of this
Arrangement or with the written standards, procedures, or guidance
issued by FEMA relating to the NFIP and applicable to the Company.
d. Failure to maintain compliance with WYO company participation
criteria at 44 CFR 62.24.
e. Any other cause so serious or compelling a nature that affects
the Company's present responsibility.
2. If FEMA cancels this Arrangement pursuant to Article II.E.1,
FEMA may require the transfer of administrative responsibilities and
the transfer of data and records as provided in Article II.D.4 and
Article II.D.7-8. If transfer is required, the Company must remit to
FEMA the unearned expenses retained by the Company. In such event, FEMA
will assume all obligations and liabilities owed to policyholders under
such policies, arising before and after the date of transfer.
3. As an alternative to the transfer of the policies to FEMA
pursuant to Article II.E.2, FEMA will consider a proposal, if it is
made by the Company, for the assumption of responsibilities by another
WYO company as provided in Article II.D.6 and Article II.D.7-8.
F. The Company shall notify FEMA, immediately, if:
1. An independent financial rating company downgrades its financial
strength during its period of performance under this Arrangement; or
2. It receives an order or directive making it unable to carry out
its obligations under this Arrangement by the insurance industry
regulatory body of any jurisdiction (e.g., Department of Insurance or
Commissioner or Superintendent of Insurance) or court of law to which
the Company is subject, including but not limited to being placed in
receivership or run-off status by a State insurance regulatory body.
G. In the event that the Company is unable or otherwise fails to
carry out its obligations under this Arrangement for reasons set out in
Article II.F.2:
1. The Company agrees to transfer, and FEMA will accept, any and
all WYO policies issued by the Company and in force as of the date of
such inability or failure to perform. In such event FEMA will assume
all obligations and liabilities within the scope of the Arrangement
owed to policyholders arising before and after the date of transfer,
and the Company will immediately transfer to FEMA all needed records
and data, pursuant to Article II.D.4 and Article II.D.7-8, and all
funds in its possession with respect to all such policies transferred
and the unearned expenses retained by the Company. As an alternative to
the transfer of the policies to FEMA, FEMA will consider a proposal, if
it is made by the Company, for the assumption of responsibilities under
this Arrangement by another WYO company as provided by Article II.D.6
and Article II.D.7-8.
2. If there is ongoing litigation, the Company must file a motion
to stay the proceedings on any and all pending litigation within the
scope of the Arrangement, and FEMA or, if approved by FEMA, another WYO
company, will assume full litigation responsibility.
H. In the event the Act is amended, repealed, expires, or if FEMA
is otherwise without authority to continue the Program, FEMA may cancel
financial assistance under this Arrangement for any new or renewal
business, but the Arrangement will continue for policies in force that
shall be allowed to run their term under the Arrangement.
I. If FEMA does not publish the Fiscal Year 2026 Arrangement in the
Federal Register on or before April 1, 2025, then FEMA may require the
continued performance of all or selected elements of this Arrangement
through December 31, 2026, but such extension may not exceed the
expiration of the six (6) month period following publication of the
Fiscal Year 2026 Arrangement in the Federal Register.
Article III. Undertakings of the Company
A. Responsibilities of the Company.
1. Policy Issuance and Maintenance. The Company must meet all
requirements of the Financial Control Plan and any guidance issued by
FEMA. The Company is responsible for the following:
a. Compliance with Rating Procedures.
b. Eligibility Determinations.
c. Policy Issuances.
d. Policy Endorsements.
e. Policy Cancellations.
f. Policy Correspondence.
g. Payment of Agents' Commissions.
h. Fund management, including the receipt, recording, disbursement,
and timely deposit of NFIP funds.
2. The Company must provide a live customer service agent that (1)
is accessible to all policyholders via telephone during business days,
and (2) can resolve commonplace customer service issues.
3. Claims Processing.
a. In general. The Company must process all claims consistent with
the Standard Flood Insurance Policy, Financial Control Plan, Claims
Manual, other guidance adopted by FEMA, and as much as possible, with
the Company's standard business practices for its non-NFIP policies.
b. Adjuster registration. The Company may not use an independent
adjuster to adjust a claim unless the independent adjuster:
i. Holds a valid Flood Control Number issued by FEMA; or
ii. Participates in the Flood Adjuster Capacity Program.
c. Claim reinspections. The Company must cooperate with any claim
reinspection by FEMA.
4. Reports. The Company must certify its business under the WYO
Program through monthly financial reports in accordance with the
requirements of the Pivot Use Procedures. The Company must follow the
Financial Control Plan and the WYO Accounting Procedures Manual. FEMA
will validate and audit, in detail, these data and compare the results
against Company reports.
5. Operations Plan. Within ninety (90) calendar days of the
commencement of this Arrangement, the Company must submit a written
Operations Plan to FEMA describing its efforts to perform under this
Arrangement. The plan must include the following:
[[Page 22424]]
a. Private Flood Insurance Separation Plan. If applicable, a
description of the Company's policies, procedures, and practices
separating their NFIP flood insurance lines of business from their non-
NFIP flood insurance lines of business, including its implementation of
Article III.F.
b. Marketing Plan. A marketing plan describing the Company's
forecasted growth, efforts to achieve that growth, and ability to
comply with any marketing guidelines provided by FEMA.
c. Policy Retention Plan. A retention plan describing the Company's
efforts to retain and renew policies and methods of communicating with
policyholders on renewals.
d. Customer Service Plan. A description of overall customer service
practices, including ongoing and planned improvement efforts.
e. Distribution Plan. A description of the Company's NFIP flood
insurance distribution network, including anticipated numbers of
agents, efforts to train those agents, and an average rate of
commissions paid to producers by state.
f. Catastrophic Claims Handling Plan. A catastrophic claims
handling plan describing how the Company will respond and maintain
service standards in catastrophic flood events, including:
i. Deploying mobile or temporary claims centers to provide
immediate policyholder assistance, including submission of notice of
loss and claim status information.
ii. Preparing people, processes, and tools for claims processing in
remote work scenarios.
iii. Preparing communications in advance for readiness throughout
the year including a suite of printed and digital materials (e.g.,
advertisements, educational materials, social media messaging, website
blogs and announcements) that provide key messaging to stakeholders,
including policyholders, agents, and the public following a
catastrophic flood event.
iv. Identifying the core areas of information technology that need
to be scaled pre-event or are scalable post-event.
v. Ensuring the availability of sufficient adjusters and examiners
to handle sudden surge in claims filings and handling.
g. Business Continuity Plan. A business continuity plan identifying
threats and risks facing the Company's NFIP-related operations and how
the Company will maintain operations in the event of a disaster
affecting its operational capabilities.
h. Privacy Protection Plan. A privacy protection plan that
describes the Company's standards and required procedures for using and
maintaining personally identifiable information, in its possession and
control or in the possession or control of its vendors or contractors.
i. System Security Plan. A system security plan that describes
system boundaries, system environments of operation, how security
requirements are implemented, and the relationships with or connections
to other systems, including plans of action that describe how
unimplemented security requirements will be met and how any planned
mitigations will be implemented, prepared in accordance with either:
i. National Institute of Standards and Technology (NIST) Special
Publication (SP) 800-171 ``Protecting Controlled Unclassified
Information in Nonfederal Information Systems and Organizations'',
Revision 2, https://csrc.nist.gov/publications/detail/sp/800-171/rev-2/final; or
ii. Another comparable standard deemed acceptable by FEMA.
B. Time Standards. WYO companies must meet the time standards
provided below. Time will be measured from the date of receipt through
the date the task is completed. In addition to the standards set forth
below, all functions performed by the Company must be in accordance
with the highest reasonably attainable quality standards generally used
in the insurance and data processing field. Applicable time standards
are:
1. Application Processing--fifteen (15) business days (Note: if the
policy cannot be sent due to insufficient or erroneous information or
insufficient funds, the Company must send a request for correction or
added moneys within ten (10) business days).
2. Renewal processing--seven (7) business days.
3. Endorsement processing--fifteen (15) business days.
4. Cancellation processing--fifteen (15) business days.
5. File examination--seven (7) business days from the day the
Company receives the final report.
6. Claims draft processing--seven (7) business days from completion
of file examination.
7. Claims adjustment--forty-five (45) calendar days average from
the receipt of Notice of Loss (or equivalent) through completion of
examination.
8. Upload transactions to Pivot--one (1) business day.
C. Policy Issuance.
1. The flood insurance subject to this Arrangement must be only
that insurance written by the Company in its own name pursuant to the
Act.
2. The Company must issue policies under the regulations prescribed
by FEMA, in accordance with the Act, on a form approved by FEMA.
3. The Company must issue all policies in consideration of such
premiums and upon such terms and conditions and in such states or areas
or subdivisions thereof as may be designated by FEMA and only where the
Company is licensed by State law to engage in the property insurance
business.
D. Installment Plans for Premium Payments. During the term of the
Arrangement, FEMA may require the Company to offer a monthly premium
installment payment option.
E. Lapse of Authority or Appropriation. FEMA may require the
Company to discontinue issuing policies subject to this Arrangement
immediately in the event Congressional authorization or appropriation
for the NFIP lapses.
F. Separation of Finances and Other Lines of Flood Insurance.
1. The Company must separate Federal flood insurance funds from all
other Company accounts, at a bank or banks of its choosing for the
collection, retention and disbursement of Federal funds relating to its
obligation under this Arrangement, less the Company's expenses as set
forth in Article IV. The Company must remit all funds not required to
meet current expenditures to the United States Treasury, in accordance
with the provisions of the WYO Accounting Procedures Manual.
2. Other Undertakings of the Company.
a. Clear communication. If the Company also offers insurance
policies covering the peril of flood outside of the NFIP in any
geographic area in which Program authorizes the purchase of flood
insurance, the Company must ensure that all public communications
(whether written, recorded, electronic, or other) regarding non-NFIP
insurance lines would not lead a reasonable person to believe that the
NFIP, FEMA, or the Federal Government in any way endorses, sponsors,
oversees, regulates, or otherwise has any connection with the non-NFIP
insurance line. The Company may assure compliance with this requirement
by prominently including in such communications the following
statement: ``This insurance product is not affiliated with the National
Flood Insurance Program.''
b. Data protection. The Company may not use non-public data,
information, or
[[Page 22425]]
resources obtained in course of executing this Arrangement to further
or support any activities outside the scope of this Arrangement.
G. Claims. The Company must investigate, adjust, settle, and defend
all claims or losses arising from policies issued under this
Arrangement. Payment of flood insurance claims by the Company bind
FEMA, subject to appeal.
H. Compliance with Agency Standards and Guidelines.
1. The Company must comply with the Act, regulations, written
standards, procedures, and guidance issued by FEMA relating to the NFIP
and applicable to the Company, including, but not limited to the
following:
a. WYO Program Financial Control Plan.
b. Pivot Use Procedures.
c. NFIP Flood Insurance Manual.
d. NFIP Claims Manual.
e. NFIP Litigation Manual.
f. WYO Accounting Procedures Manual.
g. WYO Company Bulletins.
2. The Company must market flood insurance policies in a manner
consistent with marketing guidelines established by FEMA.
3. FEMA may require the Company to collect customer service
information to monitor and improve their program delivery.
4. The Company must notify its agents of the requirement to comply
with State regulations regarding flood insurance agent education,
notify agents of flood insurance training opportunities, and assist
FEMA in periodic assessment of agent training needs.
I. Compliance with Appeals Process.
1. In general. FEMA will notify the Company when a policyholder
files an appeal. After notification, the Company must provide FEMA the
following information:
a. All records created or maintained pursuant to this Arrangement
requested by FEMA.
b. A comprehensive claim file synopsis, redacted of personally
identifiable information, that includes a summary of the appeal issues,
the Company's position on each issue, and any additional relevant
information. If, in the process of writing the synopsis, the Company
determines that it can address the issue raised by the policyholder on
appeal without further direction, it must notify FEMA. The Company will
then work directly with the policyholder to achieve resolution and
update FEMA upon completion. The Company may have a claims examiner
review the file who is independent from the original decision and who
possesses the authority to overturn the original decision if the facts
support it.
2. Cooperation. The Company must cooperate with FEMA throughout the
appeal process until final resolution. This includes adhering to any
written appeals guidance issued by FEMA.
3. Resolution of Appeals. FEMA will close an appeal when:
a. FEMA upholds the denial by the Company.
b. FEMA overturns the denial by the Company and all necessary
actions that follow are completed.
c. The Company independently resolves the issue raised by the
policyholder without further direction.
d. The policyholder voluntarily withdraws the appeal.
e. The policyholder files litigation.
4. Processing of Additional Payments from Appeal. The Company must
follow established NFIP adjusting practices and claim handling
procedures for appeals that result in additional payment to a
policyholder when FEMA does not explicitly direct such payment during
the review of the appeal.
5. Time Standards.
a. Provide FEMA with requested files pursuant to Article
III.I.1.a--ten (10) business days after request.
b. Provide FEMA with comprehensive claim file synopsis pursuant to
Article III.I.1.b--ten (10) business days after request.
c. Responding to inquiries from FEMA regarding an appeal--ten (10)
business days after inquiry.
d. Inform FEMA of any litigation filed by a policyholder with a
current appeal--ten (10) business days of notice.
J. Subrogation.
1. In general. Consistent with Federal law and guidance, the
Company must use its customary business practices when pursuing
subrogation.
2. Referral to FEMA. Pursuant to 44 CFR 62.23(i)(8), in lieu of the
Company pursuing a subrogation claim, WYO companies may refer such
claims to FEMA.
3. Notification. No more than ten (10) calendar days after either
the Company identifies a possible subrogation claim or FEMA notifies
the Company of a possible subrogation claim, the Company must notify
FEMA of its intent to pursue the claim or refer the claim to FEMA.
4. Cooperation. Pursuant to 44 CFR 62.23(i)(11), the Company must
extend reasonable cooperation to FEMA's Office of the Chief Counsel on
matters related to subrogation.
K. Access to Records. The Company must furnish to FEMA such
summaries and analysis of information including claim file information
and property address, location, and/or site information in its records
as may be necessary to carry out the purposes of the Act, in such form
as FEMA, in cooperation with the Company, will prescribe.
L. System for Award Management (SAM). The Company must be
registered in the System for Award Management. Such registration must
have an active status during the period of performance under this
Arrangement. The Company must ensure that its SAM registration is
accurate and up to date.
M. Cybersecurity.
1. In general. Unless the Company uses a compliance alternative
pursuant to Article III.M.2, the Company must implement the security
requirements specified by National Institute of Standards and
Technology (NIST) Special Publication (SP) 800-171 ``Protecting
Controlled Unclassified Information in Nonfederal Information Systems
and Organizations'', Revision 2 (https://csrc.nist.gov/publications/detail/sp/800-171/rev-2/final) for any system that processes, stores,
or transmits information that requires safeguarding or dissemination
controls pursuant to and consistent with law, regulations, this
Arrangement, or other applicable requirements, including information
protected pursuant to Article XII.C and personally identifiable
information of NFIP applicants and policyholders. Such implementation
must be validated by a third-party assessment organization.
2. Compliance alternatives. In lieu of compliance with Article
III.M.1, the Company may either:
a. Provide FEMA with documentation that the Company is securing the
systems subject to the requirements of Article III.M.1 with either:
i. ISO/IEC 27001, https://www.iso.org/isoiec-27001-information-security.html;
ii. NIST Cybersecurity Framework, https://csrc.nist.gov/publications/detail/sp/800-171/rev-2/final;
iii. Cybersecurity Maturity Model Certification (CMMC 2.0), https://dodcio.defense.gov/CMMC/;
iv. Service and Organization Controls (SOC) 2, https://www.aicpa.org/interestareas/frc/assuranceadvisoryservices/sorhome.html;
or
v. Another comparable standard deemed acceptable by FEMA.
b. Provide a plan of action that describes how unimplemented
security requirements of NIST SP 800-171, rev. 2, (https://csrc.nist.gov/publications/detail/sp/800-171/rev-2/final) will be met
and how any planned mitigations
[[Page 22426]]
will be implemented as part of the system security plan required under
Article III.A.5.i.
N. Company's Service Providers. The Company is required to ensure
all its vendors, independent adjusters and contractors are acting
consistently with FEMA's regulations, Arrangement and NFIP guidance.
Article IV. Loss Costs, Expenses, Expense Reimbursement, and Premium
Refunds
A. The Company is liable for operating, administrative, and
production expenses, including any State premium taxes, dividends,
agents' commissions or any other expense of whatever nature incurred by
the Company in the performance of its obligations under this
Arrangement but excluding other taxes or fees, such as municipal or
county premium taxes, surcharges on flood insurance premium, and
guaranty fund assessments.
B. Payment for Selling and Servicing Policies.
1. Operating and Administrative Expenses. The Company may withhold,
as operating and administrative expenses, other than agents' or
brokers' commissions, an amount from the Company's written premium on
the policies covered by this Arrangement in reimbursement of all of the
Company's marketing, operating, and administrative expenses, except for
allocated and unallocated loss adjustment expenses described in Article
IV.C. This amount will equal the sum of the average industry expenses
ratios for ``Other Act.'', ``Gen. Exp.'' And ``Taxes'' calculated by
aggregating premiums and expense amounts for each of five property
coverages using direct premium and expense information to derive
weighted average expense ratios. For this purpose, FEMA will use data
for the property/casualty industry published, as of March 15 of the
prior Arrangement year, in Part III of the Insurance Expense Exhibit in
A.M. Best Company's Aggregates and Averages for the following five
property coverages: Fire, Allied Lines, Farmowners Multiple Peril,
Homeowners Multiple Peril, and Commercial Multiple Peril (non-liability
portion).
2. Agent Compensation. The Company may retain fifteen (15) percent
of the Company's written premium on the policies covered by this
Arrangement as the commission allowance to meet the commissions or
salaries of insurance agents, brokers, or other entities producing
qualified flood insurance applications and other related expenses.
3. Growth Bonus. FEMA may increase the amount of expense allowance
retained by the Company depending on the extent to which the Company
meets the marketing goals for the Arrangement year contained in
marketing guidelines established pursuant to Article III.H.2. The total
growth bonuses paid to companies pursuant to this Arrangement may not
exceed two (2) percent of the aggregate net written premium collected
by all WYO companies. FEMA will pay the Company the amount of any
increase after the end of the Arrangement year.
C. FEMA will reimburse Loss Adjustment Expenses as follows:
1. FEMA will reimburse unallocated loss adjustment expenses to the
Company pursuant to a ``ULAE Schedule'' coordinated with the Company
and provided by FEMA.
2. FEMA will reimburse allocated loss adjustment expenses to the
Company pursuant to a ``Fee Schedule'' coordinated with the Company and
provided by FEMA. To ensure the availability of qualified insurance
adjusters during catastrophic flood events, FEMA may, in its sole
discretion, temporarily authorize the use of an alternative Fee
Schedule with increased amounts during the term of this Arrangement for
losses incurred during a time frame established by FEMA.
3. FEMA will reimburse special allocated loss expenses under 44 CFR
62.23(i)(9) and subrogation expenses reimbursable under 44 CFR
62.23(i)(8) to the Company in accordance with guidelines issued by
FEMA.
D. Loss Payments.
1. The Company must make loss payments for flood insurance policies
from federal funds retained in the bank account(s) established under
Article III.F.1 and, if such funds are depleted, from Federal funds
withdrawn from the National Flood Insurance Fund pursuant to Article V.
2. Loss payments include payments because of awards, judgments for
damages or settlements that arise under the scope of this Arrangement,
and the Authorities set forth herein. All such loss payments and
related expenses must meet the documentation requirements of the
Financial Control Plan and of this Arrangement, and the Company must
comply with the litigation documentation and notification requirements
established by FEMA. Failure to meet these requirements may result in
FEMA's decision not to provide reimbursement.
E. Litigation Oversight and Reimbursable Litigation Expenses.
1. Any litigation resulting from, related to, or arising from the
Company's compliance with the written standards, procedures, and
guidance issued by FEMA arises under the National Flood Insurance Act
of 1968 or regulations, and such legal issues raise a Federal question.
2. The Company must conduct and oversee litigation arising out of
the Company's participation in the NFIP in accordance with the National
Flood Insurance Program Litigation Manual. When a specific issue is not
addressed by the National Flood Insurance Program Litigation Manual,
the Company must consult with FEMA's WYO Oversight Team.
3. Limitation on Reimbursement and Payment of Litigation Expenses
and Payment of Judgment and Award. FEMA will not reimburse the Company,
in whole or part, for any award or judgment for damages, and any costs
to defend litigation:
a. Involving issues of agent negligence, errors or omissions;
b. Grounded in actions by the Company that are significantly
outside the scope of this Arrangement, including, but not limited to,
reckless disregard of the Company's duties under the Arrangement,
regulations or FEMA's written standards, procedures or guidance
relating to the NFIP;
c. Involving the submittal of inaccurate, false or fraudulent
requests for litigation expense reimbursement;
d. Where the Company failed to comply with the requirements of the
NFIP Litigation Manual;
e. Incurred after the Company became unable or otherwise failed to
carry out its obligations under this Arrangement for the reasons
contained in Article II.F.2, except that FEMA will reimburse the
Company for reasonable costs of filing motions to stay proceedings; or
f. When FEMA and the Company's interests diverge, including
positions on litigation strategy and settlement.
F. Refunds. The Company must make premium refunds required by FEMA
to applicants and policyholders from Federal flood insurance funds
referred to in Article III.F.1, and, if such funds are depleted, from
funds derived by withdrawing from the National Flood Insurance Fund
pursuant to Article V. The Company may not refund any premium from
Federal flood insurance funds to applicants or policyholders in any
manner other than as specified by FEMA since flood insurance premiums
are funds of the Federal Government.
G. Suspension and Debarment.
1. In general. The Company may not contract with or employ any
person who is suspended or debarred from
[[Page 22427]]
participating in federal transactions pursuant to 2 CFR part 180
(covering federal nonprocurement transactions) or 48 CFR part 9,
subpart 9.4 (covering federal procurement transactions) in relation to
this Arrangement.
2. Reimbursement. FEMA will not reimburse the company for any
expenses incurred in violation of Article IV.G.1.
3. Compliance. The Company may ensure compliance with Article
IV.G.1 by:
a. Checking the System for Awards Management at sam.gov;
b. Collecting a certification from that person; or
c. Adding a clause or condition to the transaction with that
person.
Article V. Undertakings of the Government
A. FEMA must enable the Company to withdraw funds from the National
Flood Insurance Fund daily, if needed, pursuant to prescribed
procedures implemented by FEMA. FEMA will increase the amounts of the
authorizations as necessary to meet the obligations of the Company
under Article IV.C-F. The Company may only request funds when net
premium income has been depleted. The timing and amount of cash
advances must be as close as is administratively feasible to the actual
disbursements by the recipient organization for allowable expenses.
Request for payment may not ordinarily be drawn more frequently than
daily. The Company may withdraw funds from the National Flood Insurance
Fund for any of the following reasons:
1. Payment of claims, as described in Article IV.D.
2. Refunds to applicants and policyholders for insurance premium
overpayment, or if the application for insurance is rejected or when
cancellation or endorsement of a policy results in a premium refund, as
described in Article IV.F.
3. Allocated and unallocated loss adjustment expenses, as described
in Article IV.C.
B. FEMA must provide technical assistance to the Company as
follows:
1. NFIP policy and history.
2. Clarification of underwriting, coverage, and claims handling.
3. Other assistance as needed.
C. FEMA must provide the Company with a copy of all formal written
appeal decisions conducted in accordance with Section 205 of the
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004, Public
Law 108-264 and 44 CFR 62.20.
D. Prior to the end of the Arrangement period, FEMA may provide the
Company a statistical summary of their performance during the signed
Arrangement period. This summary will detail the Company's performance
individually, as well as compare the Company's performance to the
aggregate performance of all WYO companies and the NFIP Direct
Servicing Agent.
Article VI. Cash Management and Accounting
A. FEMA must make available to the Company during the entire term
of this Arrangement the ability to withdraw funds from the National
Flood Insurance Fund provided for in Article V. The Company may
withdraw funds from the National Flood Insurance Fund for reimbursement
of its expenses as set forth in Article V. A that exceed net written
premiums collected by the Company from the effective date of this
Arrangement or continuation period to the date of the draw. In the
event that adequate funding is not available to meet current Company
obligations for flood policy claim payments issued, FEMA must direct
the Company to immediately suspend the issuance of loss payments until
such time as adequate funds are available. The Company is not required
to pay claims from their own funds in the event of such suspension.
B. The Company must remit all funds, including interest, not
required to meet current expenditures to the United States Treasury, in
accordance with the provisions of the WYO Accounting Procedures Manual
or procedures approved in writing by FEMA.
C. In the event the Company elects not to participate in the
Program in this or any subsequent fiscal year, or is otherwise unable
or not permitted to participate, the Company and FEMA must make a
provisional settlement of all amounts due or owing within three (3)
months of the expiration or termination of this Arrangement. This
settlement must include net premiums collected, funds withdrawn from
the National Flood Insurance Fund, and reserves for outstanding claims.
The Company and FEMA agree to make a final settlement of accounts for
all obligations arising from this Arrangement within forty-eight (48)
months, which may be extended for good cause and subject to audit, of
its expiration or termination, except for contingent liabilities that
must be listed by the Company. At the time of final settlement, the
balance, if any, due FEMA or the Company must be remitted by the other
immediately and the operating year under this Arrangement must be
closed.
D. Upon FEMA's request, the Company must provide FEMA with a true
and correct copy of the Company's Fire and Casualty Annual Statement,
and Insurance Expense Exhibit or amendments thereof as filed with the
State Insurance Authority of the Company's domiciliary State.
E. The Company must comply with the requirements of the False
Claims Act (41 U.S.C. 3729-3733), which prohibits submission of false
or fraudulent claims for payment to the Federal Government.
Article VII. Arbitration
If any misunderstanding or dispute arises between the Company and
FEMA with reference to any factual issue under any provisions of this
Arrangement or with respect to FEMA's nonrenewal of the Company's
participation, other than as to legal liability under or interpretation
of the Standard Flood Insurance Policy, such misunderstanding or
dispute may be submitted to arbitration for a determination that will
be binding upon approval by FEMA. The Company and FEMA may agree on and
appoint an arbitrator who will investigate the subject of the
misunderstanding or dispute and make a determination. If the Company
and FEMA cannot agree on the appointment of an arbitrator, then two
arbitrators will be appointed, one to be chosen by the Company and one
by FEMA.
The two arbitrators so chosen, if they are unable to reach an
agreement, must select a third arbitrator who must act as umpire, and
such umpire's determination will become final only upon approval by
FEMA. The Company and FEMA shall bear in equal shares all expenses of
the arbitration. Findings, proposed awards, and determinations
resulting from arbitration proceedings carried out under this section,
upon objection by FEMA or the Company, shall be inadmissible as
evidence in any subsequent proceedings in any court of competent
jurisdiction.
This Article shall indefinitely succeed the term of this
Arrangement.
Article VIII. Errors and Omissions
A. In the event of negligence by the Company that has not resulted
in litigation but has resulted in a claim against the Company, FEMA
will not consider reimbursement of the Company for costs incurred due
to that negligence unless the Company takes all reasonable actions to
rectify the negligence and to mitigate any such costs as soon as
possible after discovery of the negligence. The Company may choose not
to seek reimbursement from FEMA.
[[Page 22428]]
B. If the Company has made a claim payment to an insured without
including a mortgagee (or trustee) of which the Company had actual
notice prior to making payment, and subsequently determines that the
mortgagee (or trustee) is also entitled to any part of said claim
payment, any additional payment may not be paid by the Company from any
portion of the premium and any funds derived from any Federal funds
deposited in the bank account described in Article III.F.1. In
addition, the Company agrees to hold the Federal Government harmless
against any claim asserted against the Federal Government by any such
mortgagee (or trustee), as described in the preceding sentence, by
reason of any claim payment made to any insured under the circumstances
described above.
Article IX. Officials Not To Benefit
No Member or Delegate to Congress, or Resident Commissioner, may be
admitted to any share or part of this Arrangement, or to any benefit
that may arise therefrom; but this provision may not be construed to
extend to this Arrangement if made with a corporation for its general
benefit.
Article X. Offset
At the settlement of accounts, the Company and FEMA have, and may
exercise, the right to offset any balance or balances, whether on
account of premiums, commissions, losses, loss adjustment expenses,
salvage, or otherwise due one party to the other, its successors or
assigns, hereunder or under any other Arrangements heretofore or
hereafter entered into between the Company and FEMA. This right of
offset shall not be affected or diminished because of insolvency of the
Company.
All debts or credits of the same class, whether liquidated or
unliquidated, in favor of or against either party to this Arrangement
on the date of entry, or any order of conservation, receivership, or
liquidation, shall be deemed to be mutual debts and credits and shall
be offset with the balance only to be allowed or paid. No offset shall
be allowed where a conservator, receiver, or liquidator has been
appointed and where an obligation was purchased by or transferred to a
party hereunder to be used as an offset.
Although a claim on the part of either party against the other may
be unliquidated or undetermined in amount on the date of the entry of
the order, such claim will be regarded as being in existence as of the
date of such order and any credits or claims of the same class then in
existence and held by the other party may be offset against it.
Article XI. Equal Opportunity
A. Age Discrimination Act of 1975. The Company must comply with the
requirements of the Age Discrimination Act of 1975, Public Law 94-135
(42 U.S.C. 6101 et seq.) which prohibits discrimination on the basis of
age in any program or activity receiving federal financial assistance.
B. Americans with Disabilities Act. The Company must comply with
the requirements of Titles I, II, and III of the Americans with
Disabilities Act, Public Law 101-336 (42 U.S.C. 12101-12213), which
prohibits recipients from discriminating on the basis of disability in
the operation of public entities, public and private transportation
systems, places of public accommodation, and certain testing entities.
C. Civil Rights Act of 1964--Title VI. The Company must comply with
the requirements of Title VI of the Civil Rights Act of 1964 (42 U.S.C.
2000d et seq.), which provides that no person in the United States
will, on the grounds of race, color, or national origin, be excluded
from participation in, be denied the benefits of, or be subjected to
discrimination under any program or activity receiving federal
financial assistance. Department of Homeland Security implementing
regulations for the Act are found at 6 CFR part 21 and 44 CFR part 7.
D. Civil Rights Act of 1968. The Company must comply with Title
VIII of the Civil Rights Act of 1968, which prohibits recipients from
discriminating in the sale, rental, financing, and advertising of
dwellings, or in the provision of services in connection therewith, on
the basis of race, color, national origin, religion, disability,
familial status, and sex as implemented by the U.S. Department of
Housing and Urban Development at 24 CFR part 100.
E. Rehabilitation Act of 1973. The Company must comply with the
requirements of Section 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794), which provides that no otherwise qualified handicapped
individuals in the United States will, solely by reason of the
handicap, be excluded from participation in, be denied the benefits of,
or be subjected to discrimination under any program or activity
receiving federal financial assistance.
Article XII. Access to Books and Records
A. FEMA, the Department of Homeland Security, and the Comptroller
General of the United States, or their duly authorized representatives,
for the purpose of investigation, audit, examination, and to enable
FEMA to carry out the NFIP shall have access to any books, documents,
papers and records of the Company that are pertinent to this
Arrangement. The Company shall keep records that fully disclose all
matters pertinent to this Arrangement, including premiums and claims
paid or payable under policies issued pursuant to this Arrangement.
Records of accounts and records relating to financial assistance shall
be retained and available for three (3) years after final settlement of
accounts, and to financial assistance, three (3) years after final
adjustment of such claims. FEMA shall have access to policyholder and
claim records at all times for purposes of the review, defense,
examination, adjustment, or investigation of any claim under a flood
insurance policy subject to this Arrangement.
B. Nondisclosure by FEMA. FEMA, to the extent permitted by law and
regulation, will safeguard and treat information submitted or made
available by the Company pursuant to this Arrangement as confidential
where the information has been marked ``confidential'' by the Company
and the Company customarily keeps such information private or closely-
held. To the extent permitted by law and regulation, FEMA will not
release such information to the public pursuant to a Freedom of
Information Act (FOIA) request, 5 U.S.C. 552, without prior
notification to the Company. FEMA may transfer documents provided by
the Company to any department or agency within the Executive Branch or
to either house of Congress if the information relates to matters
within the organization's jurisdiction. FEMA may also release the
information submitted pursuant to a judicial order from a court of
competent jurisdiction.
C. Nondisclosure by Company.
1. In general. The Company, to the extent permitted by law, must
safeguard and treat information submitted or made available by FEMA
pursuant to this Arrangement as confidential where the information has
been marked or identified as ``confidential'' by FEMA and FEMA
customarily keeps such information private or closely-held. The Company
may not disclose such confidential information to a third-party without
the express written consent of FEMA or as otherwise required by law.
2. Other protections. Article XII.C.1 shall not be construed as to
limit the effect of any other requirement on the Company to protect
information from disclosure, including a joint defense agreement or
under the Privacy Act.
[[Page 22429]]
Article XIII. Compliance With Act and Regulations
This Arrangement and all policies of insurance issued pursuant
thereto are subject to Federal law and regulations.
Article XV. Relationship Between the Parties and the Insured
Inasmuch as the Federal Government is a guarantor hereunder, the
primary relationship between the Company and the Federal Government is
one of a fiduciary nature, that is, to ensure that any taxpayer funds
are accounted for and appropriately expended. The Company is a fiscal
agent of the Federal Government, but is not a general agent of the
Federal Government. The Company is solely responsible for its
obligations to its insured under any policy issued pursuant hereto,
such that the Federal Government is not a proper party to any lawsuit
arising out of such policies.
Authority: 42 U.S.C. 4071, 4081; 44 CFR 62.23.
David I. Maurstad,
Assistant Administrator for Federal Insurance Directorate, Resilience,
Federal Emergency Management Agency.
[FR Doc. 2024-06805 Filed 3-29-24; 8:45 am]
BILLING CODE 9111-52-P