Sec. 506. Addressing tomorrow’s high-risk structures today
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The National Flood Insurance Act of 1968 is amended— in section 1305 ( 42 U.S.C. 4012 ), as amended by the preceding provisions of this Act, by adding at the end the following new subsections: Except as provided in subsection
(g)and notwithstanding any other provision of this title, in carrying out the fiduciary responsibility to the National Flood Insurance Program under section 1309(e) ( 42 U.S.C. 4016(e) ) and to reduce future risks to the National Flood Insurance Fund, on or after January 1, 2021, the Administrator may not make available flood insurance coverage under this title as follows: Any new coverage for any property for which new construction is commenced on or after such date and that, upon completion of such construction, is located in an area having special flood hazards. Any new or renewed coverage for any residential property having 4 or fewer residences and a replacement value of the structure, at the time, exclusive of the value of the real estate on which the structure is located, that is equal to or exceeds the amount that is equal to $1,000,000 multiplied by the number of dwelling units in the structure (as such amount is adjusted pursuant to clause (i)), subject to the following provisions: The dollar amount in the matter of this subparagraph that precedes this clause (as it may have been previously adjusted) shall be adjusted for inflation by the Administrator upon the expiration of the 5-year period beginning upon the enactment of this subsection and upon the expiration of each successive 5-year period thereafter, in accordance with an inflationary index selected by the Administrator. The Administrator shall determine the replacement value of a property for purposes of this subparagraph using such valuation methods or indicia as the Administrator determines are reasonably accurate, consistent, reliable, and available for such purposes. For any property with risk premium rates estimated under section 1307(a)(1), on or after January 1, 2021, the Administrator shall charge risk premium rates based on the current risk of flood reflected in the flood insurance rate map or comparable risk rating metric in effect at the time a policy is newly issued, unless the newly issued policy covers a property with continuous flood insurance coverage under this title, or upon the renewal of a policy. For all such policy renewals, the Administrator shall increase the risk premium rate in accordance with section 1308(e)(2) until the risk premium rate is equal to the risk of flood reflected in the flood insurance rate map or comparable risk rating metric in effect at the time of renewal. The Administrator may implement this subsection without rulemaking, except that any such implementation shall include advance publication of notice in the Federal Register or advance notice by another comparable method, such as posting on an official website of the Administrator. The Administrator may make available flood insurance coverage under this Act for a property described in subparagraph
(A)or
(B)of subsection (f)(1), notwithstanding subsection
(f)of this section, if, within the 30-day period beginning upon submission to the Clearinghouse established pursuant to section 1350 of an application for flood insurance coverage for such property, the Clearinghouse does not provide the applicant with one or more bona fide offers for private flood insurance coverage for such property. Any flood insurance coverage made available for a property pursuant to this subsection shall be made available at chargeable premium rates otherwise determined under this title for such property, except that the Administrator shall impose and collect a surcharge for such coverage in an amount equal to 10 percent of such chargeable premium rate, which shall be deposited into the National Flood Insurance Fund established under section 1310. ; and in section 1306(a)(1) ( 42 U.S.C. 4013(a)(1) ), by inserting , subject to subsections
(f)and
(g)of section 1305 before the semicolon at the end. The Administrator of the Federal Emergency Management Agency (in this subsection referred to as the Administrator ) shall conduct a study— to analyze the feasibility and effectiveness, and problems involved, in establishing, maintaining, and operating a Flood Insurance Clearinghouse in accordance with section 1350 of the National Flood Insurance Act of 1968 (as added by the amendment made by subsection
(c)of this section); and to develop a plan and guidelines for establishment, design, and operation of such a Clearinghouse Not later than the expiration of the two-year period beginning on the date of the enactment of this Act, the Administrator shall 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 that sets forth the analysis, conclusions, and recommendations resulting from the study under this section. Such report shall include a plan for establishment, design, and operation of the Flood Insurance Clearinghouse, and guidelines for such Clearinghouse, sufficient to provide for commencement of operations of the Clearinghouse under section 1350 of the National Flood Insurance Act of 1968. Part C of chapter II of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4081 et seq.), as amended by the preceding provisions of this Act, is further amended by adding at the end the following new section: Not later than January 1, 2021, the Administrator shall establish and commence operations of a Flood Insurance Clearinghouse (in this section referred to as the Clearinghouse) in accordance with the report, plan, and guidelines required under section 506(b)(2) of the 21st Century Flood Reform Act. The Clearinghouse shall be established for the purpose of receiving applications from prospective insureds for flood insurance coverage for properties for which such coverage is prohibited under section 1305(f) of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4012(f) ) and for providing to such applicants offers for such coverage from insurers providing private flood insurance (as such term is defined for purposes of section 102(c) of the Flood Disaster Protection Act of 1973 ( 42 U.S.C. 4012a(c) ) and, subject to the limitations in this section, for coverage made available under the National Flood Insurance Program. The Clearinghouse shall have as its functions— to provide for prospective insureds to submit to the Clearinghouse applications for flood insurance coverage for properties described in subsection (b); to determine, with respect to a property identified in an application, the chargeable premium rate for coverage made available under this title; with respect to a property identified in an application, to solicit offers of coverage under private flood insurance from providers of such insurance during a reasonable period of time after such application, which offers shall provide terms and conditions of insurance, including deductibles and exclusions, that are sufficient to meet the requirements of section 102 of the Flood Disaster Protection Act of 1973 ( 42 U.S.C. 4012a ); and to provide to the applicant for insurance— any bona fide offers for private insurance coverage made pursuant to paragraph
(3)for the property identified in the application; in the case only of a property for which such coverage is authorized pursuant to subsection
(g)of section 1305, a bona fide offer for flood insurance coverage made available under this title for the property; and information to help the applicant for insurance understand such offers and the limitation under section 1305(g); The Clearinghouse shall be managed and operated by a third party pursuant to a contract with the Administrator. The Administrator may enter into such agreements with insurers providing private flood insurance coverage as may be necessary for the Clearinghouse to carry out its functions. The Clearinghouse may charge a fee to applicants to cover administrative costs of the Clearinghouse. The Clearinghouse shall report periodically, as determined by the Administrator, to the Administrator regarding the operations and activities of the Clearinghouse. .
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Sec. 506
Addressing tomorrow’s high-risk structures today
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