Item L5 L.5
G BOARD OF COUNTY COMMISSIONERS
County of Monroe Mayor Sylvia Murphy,District 5
The Florida Keys l'U � � Mayor Pro Tern Danny Kolhage,District 1
�pw° Michelle Coldiron,District 2
Heather Carruthers,District 3
David Rice,District 4
County Commission Meeting
July 17, 2019
Agenda Item Number: L.5
Agenda Item Summary #5811
BULK ITEM: Yes DEPARTMENT: BOCC District 3
TIME APPROXIMATE: STAFF CONTACT: Carol Schreck(305) 292-3430
N/A
AGENDA ITEM WORDING: Approval of resolution and transmittal letter to the Delegation
urging that any reauthorization of the National Flood Insurance Program include meaningful
affordability protections for all policyholders.
ITEM BACKGROUND:
The latest NFIP reauthorization bill, HR 3167, was passed out of the Financial Services Committee
on a 59-0 vote, on June 12, 2019. It is expected to be considered by the full House later this month.
Our main concern with this bill does not sufficiently protect affordability for all policy holders.
Instead, it proposes a narrow, means-tested approach to affordability by establishing a 5-year pilot
program for primary home-owning policy holders who are at 80% AMI. For these policyholders,
the maximum chargeable premium rate will not exceed 2% AMI(for us that would be $1,680.)
For those not at or below 80% AMI, the current, steep caps on annual increases remain in effect:
18% for primary homes and 25% for second homes and commercial properties.
The BOCC has long supported affordability protections as its number one priority in a
reauthorization bill. As such we think the new bill must include additional, broader affordability
measures for all policy holders.
Meaningful affordability safeguards are especially warranted, given that increasing weather
volatility, sea level rise, and Risk Rating 2.0 will continue to exert upward pressures on premiums.
Risk Rating 2.0, which will go into effect in October 2020, will dramatically change the way FEMA
prices NFIP policies by accounting for (1) a structure's distance to the water, (2) exposure to
different types of flood risk (storm surge, intense rainfall, etc.) and (3) the cost to rebuild — all
factors that will inevitably subject high cost, coastal communities like Monroe County to higher
premiums.
Specifically, we would like to lower the annual cap of 18-25% increases. We have in the past
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supported legislation that would have capped annual increases to 10% (the SAFE-NFIP bill).
Any new reauthorization should include a similar provision-- better yet, we would like to see a 5%
increase cap. Further, we would like to see this cap applied all policy holders and across all
properties irrespective of use(ie,primary home, secondary home, commercial building.)
The bill also does not address other issues supported by the Board such as capping Write Your Own
commissions, providing adequate mitigation funding for repetitive loss properties, or writing down
the debt and reallocating the interest payments toward mitigation and premium reduction.
The bill does contain provisions for better mapping, increasing ICC, and allowing policy holders that
leave for NFIP for the private market to come back into NFIP without penalty.
The proposed transmittal letter and resolution will be forwarded to Senator Marco Rubio, Senator
Rick Scott, Congresswoman Mucarsel-Powell and Congresswoman Maxine Walters.
PREVIOUS RELEVANT BOCC ACTION:
CONTRACT/AGREEMENT CHANGES:
N/A
STAFF RECOMMENDATION: Approval.
DOCUMENTATION:
STAMPED NFIP Affordability Reso Monroe County final
Letter to delegation re House NFIP bill July 2019 -- Monroe (Carruthers-Heather)
HR 3167 NFIP bill Section by Section from Committee
Risk_Rating2.0_Overview_May2019
Risk_Rating_Leave_Behind_FAQs_May_2019
FINANCIAL IMPACT:
Effective Date: N/A
Expiration Date:
Total Dollar Value of Contract:
Total Cost to County:
Current Year Portion:
Budgeted:
Source of Funds:
CPI:
Indirect Costs:
Estimated Ongoing Costs Not Included in above dollar amounts:
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Revenue Producing: If yes, amount:
Grant:
County Match:
Insurance Required:
Additional Details:
REVIEWED BY:
Carol Schreck Completed 07/09/2019 4:44 PM
Heather Carruthers Completed 07/09/2019 4:45 PM
Bob Shillinger Completed 07/09/2019 4:49 PM
Kathy Peters Completed 07/09/2019 6:05 PM
Board of County Commissioners Pending 07/17/2019 9:00 AM
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RESOLUTION 2019
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S LUTI COUNTY
COMMISSIONERS OF MON COUNTY,FLORIDA URGING
THAT ANY REAUTHORIZATION OF THE NATIONAL
INSURANCE GRAM MUST INCLUDE MEANINGFUL
AFFORDABILITY CI S FOR ALL POLICY
HOLDERS, SPECIFICALLY CAP ON ANNUAL
INCREASES; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, flooding is the number one natural disaster in the United States; and
WHEREAS, the National Flood Insurance Program("NFIP') is a program created by Congress to
mitigate future flood losses across the United States, by providing access to affordable flood insurance
protection for property owners and to provide an insurance alternative to disaster assistance to meet the
increasing costs of repairing damage to buildings and their contents caused by floods; and
WHEREAS, the NFIP must be reauthorized by Congress every five years. The current
authorization expired on September 30, 2017. Since then, Congress has authorized numerous short-term
extensions of the program, with the most current extension set to expire on September 30, 2019; and
WHEREAS, the NFIP maintains a significant role in providing financial protection against flood
events to Florida's and Monroe's residential and commercial property owners; and .
WHEREAS, the State of Florida has the highest number of NFIP policies,with over 1.7M policies
and 35% of the national portfolio; with the highest insured value at $4428; and the highest annual
premiums paid at$976M; and
WHEREAS, Monroe County has 31,000 NFIP policy holders, $7.513 in insured value and pays
$38M in annual premiums; and
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WHEREAS the Monroe County Commission has long supported the protection of affordability as
its number one reauthorization priority, recognizing it as (1) a critical pocketbook issue for our residents
and business owners, (2) an important component of affordable housing, and (3) a significant factor in our
community's property values and tax base; and
WHEREAS, on June 12, 2019, the House Financial Services Committee unanimously passed
legislation to reauthorize and reform the NFIP, known as H.R. 3167; and
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WHEREAS, H.R. 3167 does not sufficiently protect affordability for all of its Monroe County's
NFIP policyholders; and
WHEREAS, H.R. 3167 proposes only a narrow, means-tested approach to affordability by
establishing a 5-year pilot program for primary home-owning policy holders who are at 80% A I. For CL
these policyholders, the maximum chargeable premium rate will not exceed 2% AMI; and
WHEREAS, for all other policy holders, H.R. 3167 maintains the current, steep, annual premium co
increases of 18% for primary homes and 25% for commercial properties and second homes established in
2014; and
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WHEREAS, robust affordability protections are further warranted by FEMA's new Risk Rating
2.0 pricing policy, to go into effect in October 2020; and
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WHEREAS, Risk Rating 2.0 will dramatically change the way FEMA prices NFIP policies by q:
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accounting for (1) a structure's distance to the water, (2) exposure to different types of flood risk (storm Z
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surge, intense rainfall, etc.) and (3) the cost to rebuild — all factors that will inevitably subject high cost, 0
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coastal communities like Monroe County to higher premiums; and .2
WHEREAS,H.R. 3167 does not account for the upward pressures on NFIP premiums from Risk
Rating 2.0, or FEMA's remapping efforts currently underway in Monroe County; and
WHEREAS, the Monroe County Commission believes that the caps on current annual increases
(18% on primary residences and 25% on rental properties, commercial properties and second homes) are
unsustainable for NFIP policy holders and that a lower cap,providing a more gradual and reasonable glide
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path of increases,provides greater economic stability and fairness; and
WHEREAS, the Monroe County Commission believes it is imperative that Congress include in
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any reauthorization legislation a significantly lower cap on annual percentage increase for premiums, and
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specifically supports 5% cap on annual increases for all NFIP policyholders, on all properties; U)
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY
COMMISSIONERS OF MONROE COUNTY, FLORIDA:
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1. The above recitals are hereby incorporated into this resolution as restated herein constitute the
legislative findings and intent of the Board of County Commissioners of Monroe County, Florida.
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2. The Clerk for this Board shall furnish copies of this resolution to: S
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• U.S. Senator Marco Rubio
• U.S. Senator Rick Scott 0
• U.S. Representative Debbie Mucarsel-Powell, District 26
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• U.S. Representative Maxine Walters, House Financial Services Committee Chair
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PASSED AND ADOPTED by the Board of County Commissioners of Monroe County, 0
Florida, at a regular meeting held on the 17th day of July, 2019.
Mayor Sylvia Murphy
Mayor Pro Tern Danny Kolhage
Commissioner Michelle Coldiron
Commissioner Heather Carruthers
.......................
Comn-dssioner David Rice 9:
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(SEAL) 0
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BOARD OF COUNTY COMMISSIONERS
ATTEST: KEVIN MADOK, CLERK OF MONROE COUNTY,FLORIDA
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By: ---------------------------- —--------____------ ---- BY:
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Deputy Clerk Mayor Sylvia Murphy E
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July XX, 2019 LL
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Dear XXXXXXXX, r_
As you know, the House Financial Services Committee recently approved H.R. 3167, a bill that would
reauthorize the National Flood Insurance Program (NFIP). While we appreciate several provisions in the 0
bill,we ask that you oppose it due to the absence of meaningful affordability controls in light of the
Federal Emergency Management Agency's (FEMA)looming Risk Rating 2.0 initiative.
"Risk Rating 2.0"will dramatically change the way the NFIP prices flood policies, and is expected to be
released in April 2020 and go into effect in October 2020. All 5 million NFIP policyholders,including
more than 31,000 in Monroe County are expected to have different policy premiums under the new
system. Among the new changes impacting policy prices will be the cost of rebuilding an insured
structure,the potential impact of different types of flooding, and the distance of a property to a coast or 0
river. It will also introduce new sources of flooding, such as intense rainfall,that have not previously
been considered in the NFIP rating structure.
H.R. 3167 does not further limit the percentage rate increase that policyholders may face annually beyond
current law. Rates could still increase up to 18 percent per year for most homeowners or up to 25 percent
per year for commercial or rental properties. Landlords are forced to pass premium increases on to
tenants,most of whom are members of our workforce. These potential increases are unsustainable. It is x
imperative that Congress significantly limit the annual percentage increase that policyholders can face to
preserve program affordability.
In Monroe County, the Federal government estimates that the median income for a family of four is
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$88,200. According to the United Way's ALICE Report prior to Hurricane Irma, 12 percent of Keys
residents live under the poverty level and another 30 percent live under the ALICE"Survival"Level of
$54,768 in income. In other words, 42 percent of Keys households struggle to survive. It is estimated 0
that the income that would be required for a family of four in the Keys to achieve household financial
stability is 5104,856. But in our tourism economy,real-life salaries are less than half that. The starting
salary for a teacher or deputy is below $50,000. The cost of housing is the primary driver that gives the
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Keys the highest cost of living in Florida; flood insurance is a significant part of that cost.
Risk Rating 2.0 could create policy premiums that will remind policyholders of increases routinely faced
after passage of the so-called Biggert-Waters NFIP reauthorization in 2012. While Congress did restore Z
some affordability provisions with additional legislation in 2014, even that bill left FEMA with too much z
leeway to raise rates quickly, a reality that will resurface if Congress does not enact meaningful limits to 0
premium increases. �
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As a bi-partisan group of Senators,including Senator Rubio wrote in May to the Senate Banking
Committee, "We saw all too clearly the negative consequences of hiking premiums after the Biggert- _
Waters Act of 2012 caused costs to skyrocket,hurting policyholders... the statutory cap on premium
increases must be significantly lower than current law to ensure price shocks do not occur with
implementation of Risk Rating 2.0." Meanwhile,bi-partisan House members have declared H.R. 3167 to
be "insufficient,"noting that the bill must have "affordability safeguards to prevent premiums from being
jacked up."
If H.R. 3167 included a real premium increase limitation with an eye towards protecting constituents from
the worst impacts of Risk Rating 2.0—we suggest a maximum of 5 percent per year for all policyholders
—we would gladly support H.R. 3167. Unfortunately,without such limits, this bill will only force E
Congress to readdress the issue again soon in the face of significant constituent outcry.
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Thank you for your attention to this critical issue. 4-
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National Flood Insurance Program Reauthorization Act of 2019 (Waters)
Section by Section Summary
Sec. 1. Short Title
National Flood Insurance Program Reauthorization Act of 2019.
Sec. 2. Congressional Findings ._
This section includes several findings related to disaster costs and impacts in the United States,
the role of the National Flood Insurance Program (NFIP), and the affordability challenges that 0
policyholders face. r_
Title I—Reauthorization and Affordability
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Sec. 101. Program Extension
This section reauthorizes the NFIP for five years through September 30, 2024 and allows for a
retroactive effective date in the event of a lapse.
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Sec. 102. Demonstration Program for Policy Affordability
This section creates a five-year demonstration program to provide targeted financial assistance to
low-income policyholders. The assistance would be made available to policyholders earning 80
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percent or less of the area median income, which will be determined by the FEMA Administrator U)
in consultation with the Secretary of Housing and Urban Development. The discount will cover
the chargeable premium rate in excess of two percent of the annual area median income for the
area in which the property is located. However, all policyholders will be provided a written
statement detailing the full actuarial premium rate for the coverage so that the policyholder E
knows the full-risk rate. The section also requires that the FEMA Administrator report to 0
Congress on the demonstration. 0-
Sec. 103. Premium and Fees Relief for Families and Small Businesses 2
This section repeals surcharges currently assessed on policyholders, which in FY 2018, would co
have saved policyholders $380 million. The CBO previously recommended repealing these
surcharges in its report entitled, "Options for Reducing the Deficit: 2019 to 2028." Further, this 2
section raises the minimum loan amount that triggers the mandatory purchase requirement from
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$5,000 to $25,000.
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Sec. 104. Monthly Installment Payment of Premiums
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This section includes language similar to an amendment to H.R. 2874 from the 1151' Congress
offered by Rep. David Scott to authorize monthly payments instead of the current annual
payment for flood insurance premiums.
Sec. 105. State Revolving Loan Funds for Flood Mitigation
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This section authorizes FEMA to enter into agreements with eligible Sates to establish a flood
mitigation assistance revolving loan fund to decrease flood risk. States can use the funding for a
number of eligible activities such as elevation or relocation of the home but cannot use the funds
for other activities such as new construction or to assist high-income homeowners. This section
is similar to H.R. 1610 sponsored, by Reps. Crist and Williams.
Title 11—Mapin
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Sec. 201. Reauthorization of Appropriations for National Flood Mapping Program
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This section authorizes $500 million for each year over five years for flood mapping 0
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Sec. 202. National Flood Mapping Program
This section expands flood mapping to all areas of the United States. This section also requires
FEMA to utilize updated mapping technology, such as LiDAR, and provides for digital displays,
and property specific mapping. This section requires FEMA to submit an annual report to
Congress on the progress achieved in the mapping program under this section including
recommendations to reduce the cost and improve implementation. Lastly, this section requires
that in updating and maintaining maps, the FEMA Administrator shall ensure that maps are
adequate for identifying future flood risk. Parts of this section are similar to H.R. 4905 from the
115 ' Congress, sponsored by Reps. Gonzalez and Mooney.
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Sec. 203. Flood Mapping Modernization and Homeowner Empowerment Pilot Program
This section creates a pilot program to enhance mapping of urban flooding and better assessing
urban flood risk. This section is similar to H.R. 2462, sponsored by Reps. Quigley and Rooney.
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Sec. 204. Mapping Improvements and Reach 0
This section expands flood mapping to all areas of the United States and calls for mapping of 0
future flood risk.
Sec. 205. Appeals Regarding Existing Flood Maps
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This section provides a State, local government, or property owner, the right to appeal a denial
for a map update if the entity or individual possesses knowledge or information that the flood
elevation or an aspect of the map is inaccurate, or factors exist that mitigate the risk of flooding.
The entity or individual can further appeal an adverse decision to the Scientific Resolution Panel, CO
which shall recommend a non-binding decision to the FEMA Administrator. In the case of a B
successful or partially successful appeal, the Administrator is required to provide a refund of LL
excess premiums paid. �
Sec. 206. Appeals and Publication of Projected Special Flood Hazard Areas
This section grants homeowners 90 days after the date of the second publication of a proposed
flood insurance rate map to appeal the determination and provides that if no such appeal is
received, that the proposed rate map is final
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Sec. 207. Communication and Outreach Regarding Map Changes
This section makes a technical change to clarify that communities have a maximum of 30 days
after being notified of a new map or map update to consult with the FEMA Administrator.
Sec. 208. Adoption of Partial Flood Maps
This section allows for portions of flood insurance rate maps for which no appeal has been
submitted within the allowed for 90-day period to become final even if other portions are under E
appeal. z
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Sec. 209. New Zone for Levee-Impacted Areas r_
This section creates a new flood zone, known as the AL-E zone, that accounts for levee-impacted
areas on flood maps, and provide for flood insurance rates in accordance with the protection 0
afforded by the levee.
Sec. 210. Agricultural Structures in Special Flood Hazard Areas
This section grants local variances for certain agricultural structures so that elevation or flood
proofing of such a structure is not required if elevation or flood proofing would not be
practicable and if it would not result in increased flood heights or threats to public safety and
provided that not more than one claim payment exceeding $1,000 has been made for the 2
structure within a ten-year period. This section is similar to H.R. 830, sponsored by Reps. 0
Garamendi and LaMalfa.
Sec. 211. Technical Mapping Advisory Council
This section adds members to the Technical Mapping Advisory Council (TMAC)including a
member of a recognized professional real estate brokerage association. 0
Title III—Mitigation 0-
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Sec. 301. Increased Cost of Compliance 2
This section authorizes the FEMA Administrator to supplement its existing Increased Cost of co
Compliance (ICC)program by raising the maximum amount available from $30,000 to $60,000.
This section also expands the eligible uses of ICC funds to include alternative methods of 2
mitigation,pre-disaster mitigation, and the costs of property acquisition.
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Sec. 302. Multiple-Loss Properties B
This section grants the FEMA Administrator discretion to take into account when making
determinations regarding mitigation assistance the extent to which communities are working to I--
remedy problems with addressing multiple loss properties. The section also includes definitions
of multiple loss properties which includes repetitive loss, severe repetitive loss, and extreme
repetitive loss.
Sec. 303. Premium Rates for Certain Mitigated Properties
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This section allows for premium credits for alternative methods of mitigation that are more
appropriate for dense urban environments where elevation is not practicable. This section is
similar to H.R. 2868 from the 115 ' Congress sponsored by Reps. Zeldin and Maloney.
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Sec. 304. Coverage for Cooperatives
This section requires the FEMA Administrator to make NFIP coverage available to co-op and
condo owners. This section is similar to H.R. 2868 from the 115 1h Congress, sponsored by Reps. E
Zeldin and Maloney. 9
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Sec. 305. Voluntary Community-Based Flood Insurance Pilot Program 0
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This section authorizes the FEMA Administrator to create a pilot program that makes available
community-wide policies that cover all residential and non-residential properties in the
community. The authority for the pilot program sunsets on September 30, 2022.
Sec. 306. Mitigation Funding
This section provides $200 million each year for five years for the pre-disaster hazard mitigation
program.
Sec. 307. Community Rating System Improvements
This section makes improvements to the Community Rating System (CRS)by requiring that
credits be issued to the maximum number of communities practicable and by authorizing grants U)
to consortia of States and communities for the costs of employing individuals to coordinate and
carry out the responsibilities of participation in the CRS program. This section is similar to H.R.
3135 from the 1151' Congress, sponsored by Rep. Keating.
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Sec. 308. Community Assistance Program for Effective Floodplain Management 0
This section authorizes, for the first time, a community assistance program for floodplain 0-
management by providing community assistance grants, conducing periodic assessments of r_
technical assistance and training needs of Sates, Indian tribes, and communities,providing such
technical assistance and training, and periodically assess the losses avoided nationally due to the co
adoption of qualifying floodplain management standards. In addition, this section requires States
that receive grant funding to develop and execute a strategy to provide technical and financial
assistance to communities, including small and rural communities, and to encourage greater
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participation in the CRS program. This section authorizes $20 million each year for five years to
carry out this program. B
Title IV—Modernization
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Sec. 401. Effect of Private Flood Insurance Coverage on Continuous Coverage
Requirements
This section allows NFIP policyholders who leave the program to purchase a private policy to
return to the NFIP without penalty.
Sec. 402. Optional Coverage for Umbrella Policies
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This section authorizes the FEMA Administrator to offer umbrella policies for commercial
properties, including multifamily and agricultural properties.
Sec. 403. Annual Independent Actuarial Study
This section requires an annual independent actuarial study of the NFIP to analyze the financial
status of the NFIR The Administrator is required to submit a report to Congress describing the
results of the study. _
Sec. 404. Study on Participation Rates
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This section requires the FEMA to study and submit a report to Congress on participation rates. r_
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111sk 11a,fing 2.0 Overview
Why Rish, Rating .0?
FEMA is focused on building a culture of preparedness by closing the insurance gap.Recognizing that purchasing flood insurance can U
be confusing and time-consuming,the National Flood Insurance Program(NFIP)is redesigning its risk rating system to improve the 0-
policyholder experience. CL
Risk Rating 2.0 aims to accomplish this by leveraging industry best practices and current technology to deliver rates that are fair,easy
to understand,and better reflect a property's unique flood risk. Through these efforts,FEMA's goal is to make flood insurance
significantly easier for agents to price and sell policies, and in turn,help customers better understand their flood risk and the 0
importance of flood insurance.
Demand for change has been building for a long time, and Risk Rating 2.0 will be the culmination of a multi-year effort.
What it 'hanging?
Risk Rating 2.0 will fundamentally change the way FEMA rates a property's flood risk Rating Characteristics
and prices insurance. The current rating methodology has not changed since it was first The new risk rating plan will use
developed in the 1970s. But since then,technology has evolved and so has FEMA's easy-to-understand rating characteristics r_
ty,
understanding of flood risk. Additionally,the current rating methodology is heavily for each proper such as: 0
dependent on the 1-percent-annual-chance-event,while Risk Rating 2.0 will incorporate ca
a broader range of flood frequencies. FEMA will be pairing state-of-the-art industry • distance to the coast or another °�
technology with the NFIP's mapping data to establish a new risk-informed rating plan. flooding source
Catastrophe models,in combination with the ability to leverage the NFIP's mapping . different types of flood risk
data,will provide a better and more comprehensive understanding of risk at both the . the cost to rebuild a home
national and local level.
By reflecting the cost to rebuild,the new ca
FEMA is building a new rating engine to help agents easily price and sell policies. It rating plan will also aim to deliver fairer
will also allow policyholders to better understand their property's flood risk and how it rates for owners of lower-value homes. OF
is reflected in their cost of insurance.
New rates for all single-family homes will go into effect nationwide on October 1,2020.
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Risk Rating 2.0 will comply with existing statutory caps on premium increases. This will help transition policyholders who may face
otherwise substantial rate increases. �-
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What are the benefits oflRish, lRating 2.0? 04
The NFIP is developing Risk Rating 2.0 to deliver the following key benefits to policyholders,communities,and the flood insurance
industry: �I
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Creates an individualized picture of a property's risk Reflects more types of flood risk in rates
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Provides rates that are easier to understand for agents Uses the latest actuarial practices to set 0
and policyholders risk-based rates °2
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Reduces complexity for agents to generate
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11.earn More
To learn more about Risk Rating 2.0 and to get the most up-to-date information,please visit vaw /.J,et nn rtt m 1orx tion.
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FEMA's mission is to help people before,during and after disasters.
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Rish lbating 2.0
The National Flood Insurance Program(NFIP)is redesigning its risk rating system by leveraging industry best practices and current
technology to deliver rates that are fair,easy to understand,and better reflect a property's unique flood risk.FEMA calls this
effort Risk Rating 2.0.Below are some Frequently Asked Questions about Risk Rating 2.0.
t'requently Asked Questions
How will this initiative impact federal subsidies intended to encourage homeowners to buy insurance?Will these subsidies
continue? 0
After establishing non-discounted rates,federal law allows FEMA to offer lower,discounted rates for certain properties.The
biggest of these discounted rates,known as pre-Flood Insurance Rate Map(pre-FIRM)rates,are designed to encourage z
individuals to purchase flood insurance.The Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood -
Insurance Affordability Act of 2014 set certain minimum and maximum rate increases for properties with pre-FIRM rates. r_
Another discount that FEMA must provide is for properties newly mapped into the Special Flood Hazard Area.This discount is
designed to discourage people from dropping their insurance coverage.FEMA will continue to implement these two statutory
requirements as part of Risk Rating 2.0. 0
What data sources is FEMA using for this initiative?Where are the data coming from?
FEMA is using a combination of models to support the development of rates.We are pairing state-of-the-art industry technology
(e.g. catastrophe [CAT] models)with the NFIP's mapping data to establish a new risk-informed rating plan. Combined data from 0
CAT models and NFIP mapping data will provide a better and more comprehensive understanding of risk at both the national and C
local level. CD
FEMA is using data from multiple sources,such as:
- FEMA:Existing mapping data,NFIP policy and claims data; 2
- Other Federal Government Agencies:U.S. Geological Survey(USGS)publicly-available data;National Oceanic and 0
Atmospheric Administration(NOAA)Sea,Lake,and Overhead Surges fromHurricanes(SLOSH)data; and,U.S.Army U)
Corps of Engineers(USACE)data sets; t�
- Third-party sources: Commercially-available structural and replacement cost data and catastrophe flood models.
This is not a complete list of all data sets and FEMA may add additional data sets in the future.
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How does FEMA plan to encourage homeowners to maintain their flood insurance coverage?
We believe that Risk Rating 2.0 will help close the insurance gap across the country.We believe that fairer,more intuitive rates 01
will help future and current policyholders understand their risk,their premium,and their coverage options. FEMA plans to offer d
mitigation credits to help incentivize risk reduction efforts and reduce the cost of future flood events. uI
Risk Rating 2.0 will initially provide credits for three mitigation actions: a
- Installing flood openings per the 44 CFR 60.3 criteria;
- Elevating onto posts,piles,and piers; dp
- Elevating machinery and equipment above the lowest floor. 01
Do changes from this initiative require legislative action or approval of Congress? �I
Since 1968,the National Flood Insurance Act has required FEMA to periodically review,and if necessary revise,the way we set
non-discounted premium rates.FEMA has always followed the congressional mandate to set non-discounted premium rates based
on accepted actuarial principles.By leveraging modern technology and advanced actuarial practices,Risk Rating 2.0 is helping �I
FEMA better meet the objectives already laid out by Congress.
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What percentage of policyholders would expect to see increases in premiums?What percentage would see premiums go down?
FEMA is completing an actuarial analysis and does not have this information at this time.FEMA is committed to implementing
Risk Rating 2.0 in a transparent way and will continue to communicate information as it becomes available.
FEMA's mission is to help people before,during and after disasters.
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