Sec. 602. Flood insurance transparency, accountability, and reform

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Section 1312 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4019 ), as amended by section 601, is amended by adding at the end the following: The Administrator shall require that, in the case of any on-site inspection of a property by an engineer for the purpose of assessing any claim for losses covered by a policy for flood insurance coverage provided under this title (referred to in this subsection as a covered claim ), the final engineering report shall be provided to the insured under the policy, as follows:

The final engineering report may not be transmitted to any other person, employer, agency, or entity, before it is transmitted to the insured. The final engineering report— shall be true, complete, and unredacted; may not include alterations by, or at the request of, anyone other than the individual with responsible charge for the report; and shall include a certification, signed by the individual with responsible charge for the report, that the report does not contain any alterations described in subparagraph (B).

The final engineering report shall be transmitted to the insured in a manner prescribed by the Administrator that provides reasonable assurance that it was transmitted directly to the insured by the individual with responsible charge. A Write Your Own company or direct servicing agent in possession of a final engineering report subject to disclosure under this subsection may transmit the report to the insured without further review or approval by the Administrator. For purposes of this subsection, the term final engineering report means an engineering report, survey, or other document in connection with the covered claim that— is based on the on-site inspection; contains final conclusions with respect to an engineering issue or issues involved in the claim; and is signed by the individual with responsible charge or affixed with the seal of the individual with responsible charge, or both.

The Administrator shall require that, in the case of any on-site inspection of a property by a claims adjustor for the purpose of assessing any claim for losses covered by a policy for flood insurance coverage provided under this title (referred to in this subsection as a covered claim ), any claims adjustment claims adjustment report shall be provided to the insured under the policy, as follows: The claims adjustment report may not be transmitted to any other person, employer, agency, or entity, before it is transmitted to the insured.

The claims adjustment report— shall be true, complete, and unredacted; may not include alterations by, or at the request of, anyone other than the preparer of the report; and shall include a certification, signed by the preparer, that the report does not contain any alterations described in subparagraph (B). The claims adjustment report shall be transmitted to the insured in a manner prescribed by the Administrator that provides reasonable assurance that it was transmitted directly to the insured by the preparer.

A Write Your Own company or direct servicing agent in possession of a claims adjustment report subject to disclosure under this subsection may transmit the report to the insured without further review or approval by the Administrator. For purposes of this subsection, the term claims adjustment report — means any report or document in connection with the covered claim that is based on the on-site inspection by the claims adjustor, including any adjustment report and field report; includes any draft, preliminary version, or copy of a report described in subparagraph

(A)and any amendments or additions to any such report; and does not include a final engineering report, as that term is defined for purposes of subsection (e). In this subsection, the term claim-related document means any document, other than a final engineering report (as defined in subsection (e)) or a claims adjustment report (as defined in subsection (f)), that was prepared for the purposes of assessing a claim for losses covered by flood insurance made available under this title, including— a repair and replacement estimate or bid; an appraisal; a scope of loss; a drawing; a plan; a report, including a draft report prepared based on an on-site inspection of a property conducted by a claims adjustor or engineer; a third-party finding on the amount of loss, amount of covered damage, or cost of repairs; and any other valuation, measurement, or loss adjustment calculation of the amount of loss, amount of covered damage, or cost of repairs. Any entity servicing a claim under the national flood insurance program— shall retain each claim-related document prepared by or for the entity; upon request by a claimant or an authorized representative of a claimant, shall provide to the claimant or representative a copy of any claim-related document described in subparagraph

(A)that pertains to the claimant; and not later than 30 days after receiving notice of a claim, shall notify the claimant that the claimant or an authorized representative of the claimant may obtain, upon request, a copy of any claim-related document described in subparagraph

(A)that pertains to the claimant. When adjusting claims for any damage to or loss of property covered by flood insurance made available under this title, the Administrator shall only rely upon final claim reports that are prepared in compliance with applicable State and Federal laws regarding professional licensure and conduct. The Administrator may decline to reimburse a Write Your Own company for claim reports not prepared in accordance with paragraph (1). . Section 1341 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4072 ) is amended to read as follows: If the program is carried out as provided in section 1340, the Administrator may adjust and make payment of any claims for proved and approved losses covered by flood insurance. Upon the disallowance or partial disallowance by the Administrator of a claim described in subsection (a), or upon the refusal of the claimant to accept the amount allowed upon a claim described in subsection (a)— the claimant may institute an action against the Administrator on the claim in the United States district court for the district in which the insured property or the major part thereof shall have been situated— not later than 2 years after the date on which the claimant receives notice of disallowance or partial disallowance of the claim; or in the case of a denial of a claim for losses that is appealed to the Administrator, not later than the later of— 90 days after the date of a final determination upon appeal denying the claim in whole or in part; or 2 years after the date on which the claimant receives notice of disallowance or partial disallowance of the claim; and a court described in paragraph

(a)of a claim described in that subsection, or upon the refusal of the claimant to accept the amount allowed upon a claim described in that subsection— the claimant may institute an action on the claim against the company or other insurer in the United States district court for the district in which the insured property or the major part thereof shall have been situated— not later than 2 years after the date on which the claimant receives notice of disallowance or partial disallowance of the claim; or in the case of a denial of a claim for losses that is appealed to the Administrator, not later than the later of— 90 days after the date of a final determination upon appeal denying the claim in whole or in part; or 2 years after the date on which the claimant receives notice of disallowance or partial disallowance of the claim; and a court described in paragraph

(1)shall have original exclusive jurisdiction to hear and determine the action without regard to the amount in controversy. Nothing in this section, or in any regulation or policy implementing the national flood insurance program, may be construed to preclude a private right of action under any statute by a policyholder against a private entity for fraud arising from the handing or disposition of a claim for losses under this title. . Section 1348 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4084 ) is amended by adding at the end the following: The Administrator shall conduct an annual review of each private entity participating in the national flood insurance program, including any company that has entered into a contract with a Write Your Own company to provide any service related to a policy or claim under the national flood insurance program, including adjusting, engineering, and legal services, to ensure compliance with this title and with all policies and procedures established by the Administrator to prevent fraud and protect policyholders. . Section 1312 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4019 ), as amended by subsection (a), is amended by adding at the end the following: Not later than 1 year after the date of enactment of the Flood Insurance Affordability and Sustainability Act of 2017 , the Administrator shall create and maintain a publicly searchable online database that includes, with respect to claims filed under the national flood insurance program after that date of enactment— the aggregate number of claims filed each month, broken down by State; the aggregate number of claims paid in part or in full; and the aggregate number of claim denials appealed, the number of claim denials upheld on appeal, and the number of claim denials overturned on appeal. Nothing in this section or the Flood Insurance Affordability and Sustainability Act of 2017 , or any amendment made by that Act, shall be construed to authorize the inclusion of personally identifiable information or individual claim or specific property information in any publicly searchable database. . Part C of chapter II of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4081 et seq.) is amended by adding at the end the following: The Administrator shall oversee litigation arising under a contract for flood insurance sold under this title that is conducted by a Write Your Own company to ensure that the Write Your Own company and counsel for the company— represent the national flood insurance program reasonably and in accordance with guidelines established by the Administrator and applicable ethical requirements; and conduct litigation in a cost-effective manner. The Administrator may deny reimbursement for litigation expenses that the Administrator determines to be unreasonable, excessive, contrary to guidance issued by the Administrator, or outside the scope of any arrangement entered into with a Write Your Own company. The Administrator may direct litigation strategy for claims arising under a contract for flood insurance sold by a Write Your Own company. The Administrator may promptly take any necessary action to be substituted for the Write Your Own company in any action arising out of any claim arising under a contract for flood insurance sold by a Write Your Own company if the Administrator determines that— there is a conflict of interest between a Write Your Own company and the national flood insurance program; or such substitution is in the best interest of the United States. . Section 1306 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4013 ) is amended by adding at the end the following: A flood insurance claim filed under this title for damage to or loss of property may not be denied based on the earth movement exclusion in the Standard Flood Insurance Policy if the claim is filed as the result of a flood, including a claim for damage to or loss or property caused by earth movement that was caused by a flood. . Section 205 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 ( 42 U.S.C. 4011 note) is amended— by striking Not later than and inserting

(a); and In general .—Not later than by adding at the end the following: The Director shall ensure that the appeals process established under subsection

(a)has clear rules, forms, and deadlines. The Director shall ensure that a claimant is provided with the rules, forms, and deadlines described in paragraph

(1)at the time a claim is first denied in full or in part, including— the effective date of the denial; a justification for the denial, including supporting documentation; the date on which the period of limitation for instituting an action against the Administrator on the claim under section 1341 of the National Flood Insurance Act of 1968 ( 42 U.S.C. 4072 ) will end; and a point of contact through which the claimant can directly discuss an appeal with a representative of the Federal Emergency Management Agency. If the Administrator denies an appeal filed by a policyholder, the Administrator shall include with the notice of denial an explanation of the policyholder's legal options for further challenging the denial. .

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Sec. 602

Flood insurance transparency, accountability, and reform

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