[Federal Register: August 7, 2008 (Volume 73, Number 153)]
[Notices]
[Page 46028]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07au08-76]
[[Page 46028]]
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DEPARTMENT OF HOMELAND SECURITY
Federal Emergency Management Agency
National Flood Insurance Program (NFIP); Assistance to Private
Sector Property Insurers, Availability of FY2008 and FY2009
Arrangements
AGENCY: Federal Emergency Management Agency, DHS.
ACTION: Notice.
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SUMMARY: Each year the Federal Emergency Management Agency (FEMA) is
required by the Write-Your-Own (WYO) program Financial Assistance/
Subsidy Arrangement (Arrangement) to notify the private insurance
companies (Companies) and to make available to the Companies the terms
for subscription or re-subscription to the Arrangement. In keeping with
that requirement, this notice provides the terms to the Companies to
subscribe or re-subscribe to the Arrangement.
FOR FURTHER INFORMATION CONTACT: Edward L. Connor, FEMA, 500 C Street,
SW., Washington, DC 20472, 202-646-3429 (phone), 202-646-3445
(facsimile), or Edward.Connor@dhs.gov (e-mail).
SUPPLEMENTARY INFORMATION: Under the Write-Your-Own (WYO) program
Financial Assistance/Subsidy Arrangement (Arrangement), approximately
90 private sector property insurers issue flood insurance policies and
adjust flood insurance claims under their own names based on an
Arrangement with the Federal Insurance Administration (FIA) published
at 44 CFR part 62, appendix A. The WYO insurers receive an expense
allowance and remit the remaining premium to the Federal Government.
The Federal Government also pays WYO insurers for flood losses and pays
loss adjustment expenses based on a fee schedule. In addition, under
certain circumstances reimbursement for litigation costs, including
court costs, attorney fees, judgments, and settlements, are paid by FIA
based on documentation submitted by the WYO insurers. The complete
Arrangement is published in 44 CFR Part 62, appendix A. Each year FEMA
is required to publish in the Federal Register and make available to
the Companies the terms for subscription or re-subscription to the
Arrangement.
FEMA published a notice at 72 FR 41770, on July 31, 2007, that
during September 2007, FEMA would send a copy of the offer for the
FY2008 Arrangement, together with related materials and submission
instructions, to all private insurance companies participating under
the current FY2007 Arrangement.
The FY2007 Arrangement was extended by FEMA into FY2008 pending
publication of an Interim Rule and the release of new Schedules. The
Interim Rule published April 3, 2008 (73 FR 18182), and the revised
Schedules were finalized June 1, 2008.
The Interim Rule implemented changes to the Arrangement as follows:
1. Changes made address the WYO Companies' cooperation in helping
ensure that agents writing flood insurance under the National Flood
Insurance Program (NFIP) avail themselves of the training opportunities
needed to meet the minimum NFIP training requirements called for in
section 207 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform
Act of 2004, Public Law 108-264, 118 Stat. 727 (42 U.S.C. 4011 note).
2. In certain heavy loss years, the potential exists for the NFIP
to exhaust its authority to borrow funds from the Treasury to pay
claims. In such an event, there may be a period of time during which no
funds are available in the Treasury until the Congress takes action to
either increase the program's borrowing authority, or appropriate funds
to relieve the debt. The Interim Rule revised 44 CFR part 62, appendix
A, Article VII, section A. to provide that in such circumstances, the
Federal Insurance Administrator will suspend the NFIP's payment of
claims until funds are again available in the Treasury, and that the
WYO Companies are not required to pay claims from their own funds in
the event of such a suspension.
3. FEMA revised 44 CFR part 62, appendix A, Article III, section
C.1. of the Arrangement which deals with the Unallocated Loss
Adjustment Expense (ULAE) for which WYO Companies receive reimbursement
under the Arrangement. The ULAE rate used to be an expense
reimbursement of 3.3 percent of the incurred loss (except that it did
not include ``incurred but not reported''). The IR removed the ULAE
compensation percentage from the Arrangement. Instead, the percentage
is now communicated by FEMA to the WYO Companies through an ULAE
Schedule.
The only changes to the FY2008 Arrangement were those that were
implemented in the April 3, 2008 Interim Rule. No changes are planned
for the FY2009 Arrangement.
During August 2008, FEMA will send a copy of the offer for the
FY2009 Arrangement, together with related materials and submission
instructions, to all private insurance companies participating under
the current FY2008 Arrangement. Any private insurance company not
currently participating in the WYO Program but wishing to consider
FEMA's offer for either FY2008 or FY2009 may request a copy by writing:
Federal Emergency Management Agency, Mitigation Division, Attn: WYO
Program, 500 C Street, SW., Washington, DC 20472, or contact Edward
Connor at 202-646-3445 (Facsimile), or Edward.Connor@dhs.gov (e-mail).
Dated: August 1, 2008.
Michael Buckley.
Deputy Assistant Administrator, National Flood Insurance Program,
Federal Emergency Management Agency, Department of Homeland Security.
[FR Doc. E8-18242 Filed 8-6-08; 8:45 am]
BILLING CODE 9110-11-P