National Academies Press: OpenBook

Affordability of National Flood Insurance Program Premiums: Report 1 (2015)

Chapter: Appendix B-- Homeowner Flood Insurance Affordability Act of 2014 Section 16

« Previous: Appendix A-- Section 100236 Biggert-Waters Flood Insurance Reform Act of 2012
Suggested Citation:"Appendix B-- Homeowner Flood Insurance Affordability Act of 2014 Section 16." National Research Council. 2015. Affordability of National Flood Insurance Program Premiums: Report 1. Washington, DC: The National Academies Press. doi: 10.17226/21709.
×

Appendix B

Homeowner Flood Insurance Affordability Act of 2014 – Section 16

SEC. 16. AFFORDABILITY STUDY AND REPORT

(a) STUDY ISSUES.—Subsection (a) of section 100236 of the Biggert-Waters Flood Insurance Reform Act of 2012 (Public Law 112–141; 126 Stat. 957) is amended—

(1) in paragraph (3), by striking “and” at the end;

(2) in paragraph (4), by striking the period at the end and inserting a semicolon; and

(3) by adding at the end the following new paragraphs:

“(5) options for maintaining affordability if annual premiums for flood insurance coverage were to increase to an amount greater than 2 percent of the liability coverage amount under the policy, including options for enhanced mitigation assistance and means-tested assistance; “(6) the effects that the establishment of catastrophe savings accounts would have regarding long-term affordability of flood insurance coverage; and “(7) options for modifying the surcharge under 1308A, including based on homeowner income, property value or risk of loss.”

(b) TIMING OF SUBMISSION.—Notwithstanding the deadline under section 100236(c) of the Biggert-Waters Flood Insurance Reform Act of 2012 (Public Law 112–141; 126 Stat. 957), not later than 18 months after the date of enactment of this Act, the Administrator shall submit to the full Committee on Banking, Housing, and Urban Affairs and the full Committee on Appropriations of the Senate and the full Committee on Financial Services and the full Committee on Appropriations of the House of Rep-

Suggested Citation:"Appendix B-- Homeowner Flood Insurance Affordability Act of 2014 Section 16." National Research Council. 2015. Affordability of National Flood Insurance Program Premiums: Report 1. Washington, DC: The National Academies Press. doi: 10.17226/21709.
×

resentatives the affordability study and report required under such section 100236.

(c) AFFORDABILITY STUDY FUNDING.—Section 100236(d) of the Biggert-Waters Flood Insurance Reform Act of 2012 (Public Law 112–141; 126 Stat. 957) is amended by striking “$750,000” and inserting “$2,500,000.”

Suggested Citation:"Appendix B-- Homeowner Flood Insurance Affordability Act of 2014 Section 16." National Research Council. 2015. Affordability of National Flood Insurance Program Premiums: Report 1. Washington, DC: The National Academies Press. doi: 10.17226/21709.
×
Page 137
Suggested Citation:"Appendix B-- Homeowner Flood Insurance Affordability Act of 2014 Section 16." National Research Council. 2015. Affordability of National Flood Insurance Program Premiums: Report 1. Washington, DC: The National Academies Press. doi: 10.17226/21709.
×
Page 138
Next: Appendix C-- Section 100236 Biggert-Waters Flood Insurance Reform Act of 2012 as Modified by HFIAA 2014, Section 16 »
Affordability of National Flood Insurance Program Premiums: Report 1 Get This Book
×
Buy Paperback | $50.00 Buy Ebook | $39.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

The National Flood Insurance Program (NFIP) is housed within the Federal Emergency Management Agency (FEMA) and offers insurance policies that are marketed and sold through private insurers, but with the risks borne by the U.S. federal government. NFIP's primary goals are to ensure affordable insurance premiums, secure widespread community participation in the program, and earn premium and fee income that covers claims paid and program expenses over time. In July 2012, the U.S. Congress passed the Biggert-Waters Flood Insurance Reform and Modernization Act (Biggert-Waters 2012), designed to move toward an insurance program with NFIP risk-based premiums that better reflected expected losses from floods at insured properties. This eliminated policies priced at what the NFIP called "pre-FIRM subsidized" and "grandfathered." As Biggert-Waters 2012 went into effect, constituents from multiple communities expressed concerns about the elimination of lower rate classes, arguing that it created a financial burden on policy holders. In response to these concerns Congress passed The Homeowner Flood Insurance Affordability Act of 2014 (HFIAA 2014). The 2014 legislation changed the process by which pre-FIRM subsidized premiums for primary residences would be removed and reinstated grandfathering. As part of that legislation, FEMA must report back to Congress with a draft affordability framework.

Affordability of National Flood Insurance Program Premiums: Report 1 is the first part of a two-part study to provide input as FEMA prepares their draft affordability framework. This report discusses the underlying definitions and methods for an affordability framework and the affordability concept and applications. Affordability of National Flood Insurance Program Premiums gives an overview of the demand for insurance and the history of the NFIP premium setting. The report then describes alternatives for determining when the premium increases resulting from Biggert-Waters 2012 would make flood insurance unaffordable.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    Switch between the Original Pages, where you can read the report as it appeared in print, and Text Pages for the web version, where you can highlight and search the text.

    « Back Next »
  6. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  7. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  8. ×

    View our suggested citation for this chapter.

    « Back Next »
  9. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!