Sec. 1307. estimates of premium rates

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## Sec. 1307 estimates of premium rates **[**[42 U.S.C. 4014](/us/usc/t42/s4014)**]** ###

(a)The Administrator is authorized to undertake and carry out such studies and investigations and receive or exchange such information as may be necessary to estimate, and shall from time to time estimate, on an area, subdivision, or other appropriate basis— ####

(1)the risk premium rates for flood insurance which— #####

(A)based on consideration of— ######

(i)the risk involved and accepted actuarial principles; and ######

(ii)the flood mitigation activities that an owner or lessee has undertaken on a property, including differences in the risk involved due to land use measures, floodproofing, flood forecasting, and similar measures, and #####

(B)including— ######

(i)the applicable operating costs and allowances set forth in the schedules prescribed under section 1311 and reflected in such rates, ######

(ii)any administrative expenses (or portion of such expenses) of carrying out the flood insurance program which, in his discretion, should properly be reflected in such rates, ######

(iii)any remaining administrative expenses incurred in carrying out the flood insurance and floodplain management programs (including the costs of mapping activities under section 1360) not included under clause (ii), which shall be recovered by a fee charged to policyholders and such fee shall not be subject to any agents' commissions, company expense allowances, or State or local premium taxes,23 and 23The Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 2003 (Division K of the Consolidated Appropriations Resolution, 2003; Pub. L. 108–7; 117 Stat. 517) provides “[t]hat beginning in fiscal year 2003 and thereafter, fees authorized in 42 U.S.C. 4014(a)(1)(B)(iii) shall be collected only if provided in advance in appropriation acts”. ######

(iv)all costs, as prescribed by principles and standards of practice in ratemaking adopted by the American Academy of Actuaries and the Casualty Actuarial Society, including— ######

(I)an estimate of the expected value of future costs, ######

(II)all costs associated with the transfer of risk, and ######

(III)the costs associated with an individual risk transfer with respect to risk classes, as defined by the Administrator, would be required in order to make such insurance available on an actuarial basis for any types and classes of properties for which insurance coverage is available under section 1305(a) (or is recommended to the Congress under section 1305(b)); ####

(2)the rates, if less than the rates estimated under paragraph (1), which would be reasonable, would encourage prospective insureds to purchase flood insurance, and would be consistent with the purposes of this title, and which, together with a fee charged to policyholders that shall not be not subject to any agents' commission, company expenses allowances, or State or local premium taxes, shall include any administrative expenses incurred in carrying out the flood insurance and floodplain management programs (including the costs of mapping activities under section 1360), except that the Administrator shall not estimate rates under this paragraph for— #####

(A)any residential property which is not the primary residence of an individual; #####

(B)any severe repetitive loss property; #####

(C)any property that has incurred flood-related damage in which the cumulative amounts of payments under this title equaled or exceeded the fair market value of such property; #####

(D)any business property; or #####

(E)any property which on or after the date of enactment of the Biggert-Waters Flood Insurance Reform Act of 2012 has experienced or sustained— ######

(i)substantial damage exceeding 50 percent of the fair market value of such property; or ######

(ii)substantial improvement exceeding 50 percent of the fair market value of such property; and ####

(3)the extent, if any, to which federally assisted or other flood protection measures initiated after the date of the enactment of this title24 affect such rates. 24August 1, 1968. ###

(b)In carrying out subsection (a), the Administrator shall, to the maximum extent feasible and on a reimbursable basis, utilize the services of the Department of the Army, the Department of the Interior, The Department of Agriculture, the Department of Commerce, and the Tennessee Valley Authority, and, as appropriate, other Federal departments or agencies, and for such purposes may enter into agreements or other appropriate arrangements with any persons. ###

(c)The Administrator shall give priority to conducting studies and investigations and making estimates under this section in those States or areas (or subdivisions thereof) which he has determined have evidenced a positive interest in securing flood insurance coverage under the flood insurance program. ###

(d)Notwithstanding any other provision of law, any structure existing on the date of enactment of the Flood Disaster Protection Act of 197325 and located within Avoyelles, Evangeline, Rapides, or Saint Landry Parish in the State of Louisiana, which the Administrator determines is subject to additional flood hazards as a result of the construction or operation of the Atchafalaya Basin Levee System, shall be eligible for flood insurance under this title (if and to the extent it is eligible for such insurance under the other provisions of this title) at premium rates that shall not exceed those which would be applicable if such additional hazards did not exist. 25December 31, 1973. ###

(e)Notwithstanding any other provision of law, any community that has made adequate progress, acceptable to the Administrator, on the construction or reconstruction of a flood protection system which will afford flood protection for the one-hundred-year frequency flood as determined by the Administrator, shall be eligible for flood insurance under this title (if and to the extent it is eligible for such insurance under the other provisions of this title) at premium rates not exceeding those which would be applicable under this section if such flood protection system had been completed. The Administrator shall find that adequate progress on the construction or reconstruction of a flood protection system, based on the present value of the completed flood protection system, has been made only if:

(1)100 percent of the cost of the system has been authorized;

(2)at least 60 percent of the cost of the system has been appropriated;

(3)at least 50 percent of the cost of the system has been expended; and

(4)the system is at least 50 percent completed.Notwithstanding any other provision of law, in determining whether a community has made adequate progress on the construction, reconstruction, or improvement of a flood protection system, the Administrator shall consider all sources of funding, including Federal, State, and local funds. ###

(f)Notwithstanding any other provision of law, this subsection shall apply to riverine and coastal levees that are located in a community which has been determined by the Administrator of the Federal Emergency Management Agency to be in the process of restoring flood protection afforded by a flood protection system that had been previously accredited on a Flood Insurance Rate Map as providing 100-year frequency flood protection but no longer does so, and shall apply without regard to the level of Federal funding of or participation in the construction, reconstruction, or improvement of the flood protection system. Except as provided in this subsection, in such a community, flood insurance shall be made available to those properties impacted by the disaccreditation of the flood protection system at premium rates that do not exceed those which would be applicable to any property located in an area of special flood hazard, the construction of which was started prior to the effective date of the initial Flood Insurance Rate Map published by the Administrator for the community in which such property is located. A revised Flood Insurance Rate Map shall be prepared for the community to delineate as Zone AR the areas of special flood hazard that result from the disaccreditation of the flood protection system. A community will be considered to be in the process of restoration if— ####

(1)the flood protection system has been deemed restorable by a Federal agency in consultation with the local project sponsor; ####

(2)a minimum level of flood protection is still provided to the community by the disaccredited system; and ####

(3)restoration of the flood protection system is scheduled to occur within a designated time period and in accordance with a progress plan negotiated between the community and the Federal Emergency Management Agency. Communities that the Administrator of the Federal Emergency Management Agency determines to meet the criteria set forth in paragraphs

(1)and

(2)as of January 1, 1992, shall not be subject to revised Flood Insurance Rate Maps that contravene the intent of this subsection. Such communities shall remain eligible for C zone rates for properties located in zone AR for any policy written prior to promulgation of final regulations for this section. Floodplain management criteria for such communities shall not require the elevation of improvements to existing structures and shall not exceed 3 feet above existing grade for new construction, provided the base flood elevation based on the disaccredited flood control system does not exceed five feet above existing grade, or the remaining new construction in such communities is limited to infill sites, rehabilitation of existing structures, or redevelopment of previously developed areas.The Administrator of the Federal Emergency Management Agency shall develop and promulgate regulations to implement this subsection, including minimum floodplain management criteria, within 24 months after the date of enactment of this subsection.26 26The date of enactment was October 28, 1992. ###

(g)No Extension of Subsidy to New Policies or Lapsed Policies The Administrator shall not provide flood insurance to prospective insureds at rates less than those estimated under subsection (a)(1), as required by paragraph

(2)of that subsection, for— ####

(1)any policy under the flood insurance program that has lapsed in coverage,,27 unless the decision of the policy holder to permit a lapse in flood insurance coverage was as a result of the property covered by the policy no longer being required to retain such coverage; or 27Two commas so in law. See amendment made by section 3(a)(1)(B) of Public Law 113–89. ####

(2)any prospective insured who refuses to accept any offer for mitigation assistance by the Administrator (including an offer to relocate), including an offer of mitigation assistance— #####

(A)following a major disaster, as defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122); or #####

(B)in connection with— ######

(i)a repetitive loss property; or ######

(ii)a severe repetitive loss property. ###

(h)Definition In this section, the term “**severe repetitive loss property**” has the following meaning: ####

(1)Single-family properties In the case of a property consisting of 1 to 4 residences, such term means a property that— #####

(A)is covered under a contract for flood insurance made available under this title; and #####

(B)has incurred flood-related damage— ######

(i)for which 4 or more separate claims payments have been made under flood insurance coverage under this chapter, with the amount of each such claim exceeding $5,000, and with the cumulative amount of such claims payments exceeding $20,000; or ######

(ii)for which at least 2 separate claims payments have been made under such coverage, with the cumulative amount of such claims exceeding the value of the property. ####

(2)Multifamily properties In the case of a property consisting of 5 or more residences, such term shall have such meaning as the Director28 shall by regulation provide. 28So in law. Probably should read “Administrator”. See amendments made by sections 100205(b)(1)(B) and 100238(b)(1) of Public Law 112–141.

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