Summary: S.2284 — 110th Congress (2007-2008)All Information (Except Text)

Bill summaries are authored by CRS.

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Reported to Senate without amendment (11/01/2007)

(This measure has not been amended since it was introduced. The summary has been expanded because action occurred on the measure.)

Flood Insurance Reform and Modernization Act of 2007 - (Sec. 4) Amends the National Flood Insurance Act of 1968 (Act) to extend the national flood insurance program (Program) though FY2013.

(Sec. 5) Requires the Director of the Federal Emergency Management Agency (FEMA) to make national flood insurance available for multifamily properties of more than four units.

(Sec. 6) Requires the FEMA Director to estimate the exclusion of certain prospective insureds from purchasing flood insurance at risk premium rates less than those estimated for specified properties (including any property not an individual's primary residence, severe repetitive loss property, and any business property). Sets an annual risk premium rate limitation of 25% for such properties.

Prohibits the Director from providing flood insurance to prospective insureds at risk premium rates less than those otherwise estimated for new or lapsed policies.

Increases from 10% to 15% the annual limitation on risk premium rate increases for any properties within any single risk classification.

(Sec. 7) Instructs FEMA to issue final regulations establishing revised definitions of special flood hazard areas, including residual risk areas.

Subjects such areas to mandatory flood insurance purchase requirements.

(Sec. 8) Requires adjustment of flood insurance risk premium rates to reflect the current risk of flood to property located in an area participating in the Program.

(Sec. 9) Adds a new requirement for those states and areas where flood insurance must be made available.

Requires such states or areas to give satisfactory assurance that by December 31, 2008, state-chartered lending institutions not insured by the Federal Deposit Insurance Corporation shall be subject to state regulations consistent with the Flood Disaster Protection Act of 1973.

(Sec. 10) Amends the Flood Disaster Protection Act of 1973 to increase from $350 to $2000 the civil monetary penalty for a single violation of the Act. Repeals the limitation upon the maximum penalty amount that may be imposed against any single regulated lending institution or enterprise in any calendar year.

(Sec. 11) Revises the requirement that federal entities responsible for lending regulation require by regulation the payment of flood insurance premiums to a mortgage lender for deposit in an escrow account. Changes the property reference from real estate or mobile home to any property for which a loan has been made for purposes of acquisition or construction.

Extends the same requirement to state entities responsible for lending regulations with respect to lending institutions they supervise.

Requires any regulated lending institution, upon final payment of a mortgage, to notify the policyholder: (1) that insurance coverage may cease with such final payment; and (2) how flood insurance coverage may be continued after the life of the loan.

(Sec. 12) Declares that the Secretary of the Treasury relinquishes the right to any repayment of loans to FEMA, subject to specified conditions, to the extent such borrowed sums were used to fund the payment of flood insurance claims resulting from the hurricanes of 2005.

Increases from $1.5 billion to $20.775 billion, during FY2008 only, the maximum amount of loans and obligations the FEMA Director may issue to the Secretary of the Treasury with the President's approval for the Program.

(Sec. 13) Prescribes minimum deductibles for claims under the Program for specified properties.

Specifies the minimum annual deductible for pre-FIRM properties (containing a structure neither constructed nor substantially improved after the later of December 31, 1974, or the effective date of the initial rate map published by the FEMA Director under the National Flood Insurance Act of 1968 for the pertinent area) as: (1) $1,500, if the flood insurance covers structural damage of $100,000 or less; and (2) $2,000, if the flood insurance covers structural damage greater than $100,000.

Sets the minimum annual deductible for post-FIRM properties at $750 in the first instance, and $1,000 in the second.

(Sec. 14) Revises requirements for the FEMA Director's prescription of chargeable flood insurance premium rates. Repeals the requirement that the Director consult with certain entities before prescribing rates.

Requires such rates, in addition to meeting other conditions, to be adequate, on the basis of accepted actuarial principles, to cover the average historical loss year obligations incurred by the National Flood Insurance Fund.

(Sec. 15) Instructs the Director to establish in the Treasury a National Flood Insurance Reserve Fund, which shall maintain 1% of the sum of the total potential loss exposure of all outstanding flood insurance policies in force in the prior fiscal year, or any higher percentage the Director determines appropriate.

(Sec. 16) Requires any funds borrowed by FEMA for the Program to include a repayment schedule, which shall be transmitted not only to the Secretary but to specified congressional committees.

(Sec. 17) Prohibits FEMA from denying payment of certain flood insurance claims by condominium owners who purchased such flood insurance separate and apart from the flood insurance purchased by the condominium association, based on the flood insurance coverage of the association or others on the association's overall property.

(Sec. 18) Establishes the Technical Mapping Advisory Council to recommend mapping standards and guidelines for flood insurance rate maps.

(Sec. 19) Requires the FEMA Director, in coordination with the Technical Mapping Advisory Council, to establish an ongoing program for review, update, and maintenance of Program rate maps. Authorizes appropriations for FY2008-FY2013.

(Sec. 20) Removes the limitation placed upon state or local government contributions for the cost of updating flood maps.

(Sec. 21) Directs the Secretary of Homeland Security, the FEMA Director, the Director of the Office of Management and Budget (OMB), and the heads of specified federal agencies to: (1) coordinate and share data on flood risk determination and geospatial data; and (2) report to Congress an interagency budget crosscut report that displays the budget proposed for agencies working on flood risk determination data and digital elevation models, including planned agency transfers.

(Sec. 22) Directs the National Academy of Public Administration to study and report to Congress on how FEMA can: (1) improve interagency coordination on flood mapping, including a funding strategy to leverage and coordinate budgets and expenditures; and (2) establish joint funding mechanisms with other governmental agencies.

(Sec. 23) Exempts from certain floor insurance purchase requirements any area located within the 500-year flood plain.

(Sec. 24) Amends the Real Estate Settlement Procedures Act of 1974 (RESPA) to require that certain public information booklets include the availability of federal flood insurance.

(Sec. 25) States that a temporary residential structure built for the purpose of testing certain new flood proofing technology in any state or community receiving flood mitigation assistance may not be construed to violate any flood risk mitigation plan developed by that state or community and approved by FEMA.

(Sec. 26) Requires the FEMA Director, upon state insurance commissioner request, to cause Program representatives to participate in state disaster claims mediation programs.

(Sec. 27) Directs FEMA to: (1) continue to work to implement minimum training and education standards for insurance agents who sell flood insurance policies; and (2) report to Congress on implementation of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004.

(Sec. 28) Directs the FEMA Director to collect additional information regarding certain claims payments by private sector companies authorized to participate in the Write Your Own program (WYO).

(Sec. 29) Authorizes such companies to make specified biennial expense reports to Congress.

Requires the FEMA Director to conduct rulemaking proceedings to: (1) devise a data collection methodology to allow FEMA to collect information on the expenses of property and casualty insurance companies participating in the WYO program for selling, writing, and servicing, standard flood insurance policies; and (2) formulate revised reimbursements to property and casualty insurance companies participating in the WYO program for their related expenses.

Directs the Comptroller General to study and report to specified congressional committees on the efficacy, adequacy, and sufficiency of such rules.

(Sec. 30) Extends the pilot program for mitigation of severe repetitive loss properties through FY2013. Directs FEMA to report to Congress on the implementation status of the program.

(Sec. 31) Establishes in FEMA the Office of the Flood Insurance Advocate to assist insureds in resolving problems with FEMA.

Requires such Office to report annually to Congress directly, without any prior review or comment from FEMA, Department of Homeland Security, or OMB.

Provides for appointment of regional flood insurance advocates, as well as temporary state or local offices following a flood event.

Authorizes the National Flood Insurance Advocate, upon application by a qualified insured, to issue a Flood Insurance Assistance Recommendation to take or refrain from taking specified action, if the qualified insured is suffering a significant hardship, such as a significant delay in resolving claims while incurring significant resulting costs, or where the insured is at risk of adverse action, including the loss of property, as a result of the manner in which the flood insurance laws are being administered by the FEMA Director. Specifies required responses by the FEMA Director to such a Recommendation.

(Sec. 32) Requires the Comptroller General to report to Congress on: (1) expansion of the Program; (2) pre-FIRM structures receiving discounted premiums; and (3) a review of the three largest FEMA contractors used in administering the Program.