I
112th CONGRESS
2d Session
H. R. 5740
IN THE HOUSE OF REPRESENTATIVES
May 15, 2012
Mrs. Biggert introduced the following bill; which was referred to the Committee on Financial Services
A BILL
To extend the National Flood Insurance Program, and for other purposes.
Short title
This Act may be cited as the
National Flood Insurance Program
Extension Act
.
Extension of program
In general
Section 1319 of the
National Flood Insurance Act of 1968 (42 U.S.C. 4026) is amended by striking
the earlier of the date of the enactment into law of an Act that
specifically amends the date specified in this section or May 31, 2012
and inserting June 30, 2012
.
Financing
Section 1309(a) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4016(a)) is amended by striking the
earlier of the date of the enactment into law of an Act that specifically
amends the date specified in this section or May 31, 2012
and inserting
June 30, 2012
.
Use of private insurance to satisfy mandatory purchase requirement
Section 102(b) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(b)) is amended—
in paragraph (1)—
by striking
lending institutions not to make
and
inserting
lending institutions—
not to make
;
in subparagraph
(A), as designated by subparagraph (A) of this paragraph, by striking
less.
and inserting less; and
; and
by adding at the end the following new subparagraph:
to accept private flood insurance as satisfaction of the flood insurance coverage requirement under subparagraph (A) if the coverage provided by such private flood insurance meets the requirements for coverage under such subparagraph.
;
in paragraph (2),
by inserting after provided in paragraph (1).
the following new
sentence: Each Federal agency lender shall accept private flood
insurance as satisfaction of the flood insurance coverage requirement under the
preceding sentence if the flood insurance coverage provided by such private
flood insurance meets the requirements for coverage under such
sentence.
;
in paragraph (3),
in the matter following subparagraph (B), by adding at the end the following
new sentence: The Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation shall accept private flood insurance as
satisfaction of the flood insurance coverage requirement under the preceding
sentence if the flood insurance coverage provided by such private flood
insurance meets the requirements for coverage under such sentence.
;
and
by adding at the end the following new paragraph:
Private flood insurance defined
In this subsection, the term private flood insurance means a contract for flood insurance coverage allowed for sale under the laws of any State.
.
Privatization initiatives
FEMA and GAO reports
Not later than the expiration of the 18-month period beginning on the date of the enactment of this Act, the Administrator of the Federal Emergency Management Agency and the Comptroller General of the United States shall each conduct a separate study to assess a broad range of options, methods, and strategies for privatizing the national flood insurance program and shall each submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate with recommendations for the best manner to accomplish such privatization.
Private risk-Management initiatives
Authority
The Administrator of the Federal Emergency Management Agency may carry out such private risk-management initiatives under the national flood insurance program as the Administrator considers appropriate to determine the capacity of private insurers, reinsurers, and financial markets to assist communities, on a voluntary basis only, in managing the full range of financial risks associated with flooding.
Assessment
Not later than the expiration of the 12-month period beginning on the date of the enactment of this Act, the Administrator shall assess the capacity of the private reinsurance, capital, and financial markets by seeking proposals to assume a portion of the program’s insurance risk and submit to the Congress a report describing the response to such request for proposals and the results of such assessment.
Protocol for release of data
The Administrator shall develop a protocol to provide for the release of data sufficient to conduct the assessment required under paragraph (2).
Reinsurance
The National Flood Insurance Act of 1968 is amended—
in section
1331(a)(2) (42 U.S.C. 4051(a)(2)), by inserting , including as
reinsurance of insurance coverage provided by the flood insurance
program
before , on such terms
;
in section 1332(c)(2) (42 U.S.C.
4052(c)(2)), by inserting or reinsurance
after flood
insurance coverage
;
in section 1335(a) (42 U.S.C. 4055(a))—
by inserting
(1)
after (a)
; and
by adding at the end the following new paragraph:
The Director is authorized to secure reinsurance coverage of coverage provided by the flood insurance program from private market insurance, reinsurance, and capital market sources at rates and on terms determined by the Director to be reasonable and appropriate in an amount sufficient to maintain the ability of the program to pay claims and that minimizes the likelihood that the program will utilize the borrowing authority provided under section 1309.
;
in section 1346(a) (12 U.S.C. 4082(a))—
in the matter
preceding paragraph (1), by inserting , or for purposes of securing
reinsurance of insurance coverage provided by the program,
before
of any or all of
;
in paragraph (1)—
by
striking estimating
and inserting Estimating
;
and
by striking the semicolon at the end and inserting a period;
in paragraph (2)—
by
striking receiving
and inserting Receiving
;
and
by striking the semicolon at the end and inserting a period;
in paragraph (3)—
by
striking making
and inserting Making
; and
by
striking ; and
and inserting a period;
in paragraph (4)—
by
striking otherwise
and inserting Otherwise
;
and
by redesignating such paragraph as paragraph (5); and
by inserting after paragraph (3) the following new paragraph:
Placing reinsurance coverage on insurance provided by such program.
; and
in section
1370(a)(3) (42 U.S.C. 4121(a)(3)), by inserting before the semicolon at the end
the following: , is subject to the reporting requirements of the
Securities Exchange Act of 1934, pursuant to section 13(a) or 15(d) of such Act
(15 U.S.C. 78m(a), 78o(d)), or is authorized by the Director to assume
reinsurance on risks insured by the flood insurance program
.
Assessment of Claims-Paying ability
Assessment
Not later than September 30 of each year, the Administrator of the Federal Emergency Management Agency shall conduct an assessment of the claims-paying ability of the national flood insurance program, including the program’s utilization of private sector reinsurance and reinsurance equivalents, with and without reliance on borrowing authority under section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 4016). In conducting the assessment, the Administrator shall take into consideration regional concentrations of coverage written by the program, peak flood zones, and relevant mitigation measures.
Report
The Administrator shall submit a report to the Congress of the results of each such assessment, and make such report available to the public, not later than 30 days after completion of the assessment.
Studies of voluntary community-based flood insurance options
Studies
The Administrator of the Federal Emergency Management Agency and the Comptroller General of the United States shall each conduct a separate study to assess options, methods, and strategies for offering voluntary community-based flood insurance policy options and incorporating such options into the national flood insurance program. Such studies shall take into consideration and analyze how the policy options would affect communities having varying economic bases, geographic locations, flood hazard characteristics or classifications, and flood management approaches.
Reports
Not later than the expiration of the 18-month period beginning on the date of the enactment of this Act, the Administrator of the Federal Emergency Management Agency and the Comptroller General of the United States shall each submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on the results and conclusions of the study such agency conducted under subsection (a), and each such report shall include recommendations for the best manner to incorporate voluntary community-based flood insurance options into the national flood insurance program and for a strategy to implement such options that would encourage communities to undertake flood mitigation activities.
