Changes to the National Flood Insurance Program – What to ExpectImpact of changes to the NFIP under the Biggert-Waters Flood Insurance and Reform Act 0f 2012 (BW-12) and the Homeowners Flood Insurance Affordability Act of 2014 (HFIAA)

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Why the Changes to the NFIP Insurance Program?

1968: Congress created the NFIP to make affordable flood insurance generally available. • To participate, communities adopt and enforce floodplain

management measures for all new development.• For structures built before FEMA mapped the Special Flood Hazard

Area (called Pre-FIRM properties), the NFIP made flood insurance available at subsidized rates .

45 years later: The costs and consequences of flooding are increasing and artificially low rates and discounts no longer are sustainable.

In 2012, Congress passed legislation (BW-12) to make the program more sustainable and financially sound over the long term.

In 2014, Congress passed legislation (HFIAA) to reform some sections of BW-12

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Changes to NFIP Insurance BW-12 and HFIAA• Establish a Reserve Fund (5% for most policies)• Annual premium adjustment cap raised from 10% to 20%

(18% HFIAA)

Implementation Pending (HFIAA)• Surcharge on all policies to offset the subsidized policies and

achieve the financial sustainability goals of BW-12. • $25 annually on Primary Residence• $250 annually on All other policies, including full risk rated policies

This fee will continue until all Pre-FIRM subsidies are eliminated Surcharges are not considered part of the premium and are not

subject to the premium increase caps

All policyholders will receive a premium increase

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NFIP Rate ChangesPre-FIRM Primary Residence (definition changing June 2014*)

rates will increase up to 18%

Pre-FIRM Non-Primary Residence January 2013rates will increase 25 % annually until they reflect the full-risk rate.

Pre-FIRM Business & Repetitive Loss/Severe Repetitive Loss properties October 2013

rates will increase 25 % annually until they reflect the full-risk rate.

All other rating groups will increase up to 18% annually

Annual rate increases include the 5% Reserve Fund fee

*Primary Residence. For rating purposes only, FEMA defines a primary residence as a building that will be lived in by an insured or an insured’s spouse for more than 50% of the 365 days following the policy effective date. (June 2014)

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Homeowner Flood Insurance Affordability Act 2014 (HFIAA) Implementation Pending

Effective on or after May 1, 2014 Pre-FIRM rates may be used. New policies will be issued with Pre-FIRM rates. Renewals will be re-rated with Pre-FIRM rates (October 2013 Flood Insurance Manual).

Applicable refunds will be implemented at a later date.

• Refunds Guidance and rate tables being developed. Refunds only to policyholders who received rate increases under BW-

12 that are revoked by HFIAA.

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Adoption of a new flood map?Implementation Pending

New SFHA / Zone Change / Increased BFE • BW-12 Removed Grandfathering*/ HFIAA restored

grandfathering

• BW-12 Elimination of PRP Eligibility Extension / HFIAA - Eligible for PRP first year

• 18% cap on annual increase after a map update

*Grandfathering-- charging of insurance premiums for a structure based on a prior FIRM

• Continuous Coverage

• Built in Compliance

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Affordability Study / Framework

The affordability study required by BW-12 is underway and being conducted by the National Academies of Sciences as specified in BW-12.

HFIAA requires FEMA to prepare a draft affordability framework, which is due to Congress 18 months after completion of the affordability study.

The affordability framework will include proposals and proposed regulations for ensuing flood insurance affordability among low-income populations.

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Mapping

Technical Mapping Advisory Council (TMAC) to review the new national flood mapping program activities authorized under the 2012 and 2014 flood insurance reform laws. • FEMA will seek the TMAC’s recommendations on meeting new

requirements for the new mapping program including the identification of residual risk areas, coastal flooding information, land subsidence, erosion, expected changes in flood hazards with time, and others.

• The law requires the Administrator to certify in writing to Congress that FEMA is utilizing “technically credible” data and mapping approaches.

Technical Mapping Advisory Council

FEMA will continue Mapping activities BW-12 requires FEMA to enhance coordination with communities

before and during mapping activities and requires FEMA to report certain information to members of Congress for each State and congressional district affected by preliminary maps.

Sec. 30 of HFIAA requires additional layers of enhanced notification and outreach to congress and other stakeholders.

Enhanced Communication and Outreach

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Mapping

The Act lifts the $250,000 limit on the amount FEMA can spend to implement a program to reimburse property owners and communities for successful map appeals based on a scientific or technical error.

The Act applies to statutory appellants who successfully appeal the Agency’s proposed flood elevations and special flood hazard areas. 

Rulemaking is required to implement this provision The new law does not apply to Letter of Map Amendment

(LOMA) and Letter of Map Revision (LOMR) requests, or any expenses associated with them.

Flood Insurance Rate Map Appeals

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Mapping

Authorizes FEMA to account for state and local funds used in the construction or restoration of a flood protection project when determining whether the project meets the statutory requirements to be eligible for discounted premiums. (Sec. 19)

Permits FEMA to include the value of existing protection features in measuring adequate progress for the restoration of levees. (Sec. 19)

Flood Protection Systems

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Mapping

• Law exempts mapping fees for flood map changes due to habitat restoration projects, dam removal, culvert re-design or installation, or the installation of fish passages. (Sec. 22)

• Law requires FEMA to consider the effects of non-structural flood control features, such as dunes, and beach and wetland restoration when it maps the special flood hazard area. (Sec. 27)

Fees

Flood Control Features

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Moving Forward

FEMA Region 10 Mitigation Program areas will advise our stakeholders as HQ guidance and implementation of BW-12 and HFIAA are released.

LEVEES: OVERVIEW ON CHANGES TO

POLICIES

David Ratté, P.E.FEMA Region X Mitigation DivisionRisk Analysis Branch

Objectives:

• FEMA’s roles

• Ongoing levee projects by state

• Updates pertaining to Biggert-Waters (2012) and HFIAA (2014)

• Non-accredited levee analysis and mapping approach and guidance (2011-Present)

• Region X Perspective

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FEMA’s Role - LeveesMap levee-related flood risk and “accredits” levees for mapping purposes only.

Accredit levees based on the certification documentation provided by the community or another interested party.

FEMA does not own, operate, maintain, inspect, or certify levees or flood control systems.

Produce and/or distribute outreach and communication materials.

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ALASKA

2-3 Studies

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IDAHO

8 Studies

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OREGON

11 Studies

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WASHINGTON14 Studies

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Biggert-Waters and Homeowner Flood Insurance Affordability Acts

- Residual and graduated risks for areas associated with potential levee and dam failures

- Levee restoration/improvement projects - Federal funding no longer required- Changes “adequate progress” requirements

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Shaded Zone X or Zone B

- Leveed Area (also sometimes referenced as the protected area)

NLD and FIRM images…

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How to acquire a restoration designation?

Requirements per CFR• Community must apply for use of this zone designation• Prior to new legislation, AR designation required that the

levee was constructed with Federal funds (regulations not updated at this time) shown as providing protection, and “de-certified”

• Requesting community must document adequate progress

• New legislation extends application of this process to coastal levees

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Zone AR and A99 AR Flood Zone – used to map the landward side of a levee undergoing

restoration – usually done before a levee qualifies for A99 A99 Flood Zone – used to map the landward side of a levee that is

making “adequate progress” towards being restored. Enables a community to avoid de-accreditation of a previously certified

levee while it is being restored. Usually has lower insurance rates and less rigorous floodplain

management requirements

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More Information: Fact Sheets and Frequently Asked Questions

Zone AR (Flood Protection Restoration)• Requirements Summary for State and Local Officials• Frequently Asked Questions Regarding the Zone AR

Flood Insurance Risk Zone Designation

Zone A99 (Adequate Progress on Flood Protection Systems)• Zone A99 Requirements Summary for State and Local

Officials• Frequently Asked Questions Regarding the Zone A99

Designation

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Analysis and Mapping of Non-Accredited Levees

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FEMA Levee Status: Accredited vs. Non-Accredited

Accreditation – FEMA’s process to review and accept certification data and documentation and to update the Flood Insurance Study

To be accredited by FEMA, a levee must meet ALL Section 65.10 requirements, including• General Requirements—65.10(a)• Design Criteria—65.10(b)• Operation Plans and Criteria—65.10(c)• Maintenance Plans and Criteria—65.10(d)• Certification Requirements—65.10(e)

Non-accredited levee – any levee that does not meet certification requirements or the definition of a levee.

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Non-Levee Embankment• any manmade topographic feature that does not meet the

definition of a levee, e.g. highway embankment (FHWA Policy) or railroad grade

Silvies Levee (http://www.flickr.com/photos/oregondot/5600666113/in/set-72157626331012873)

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Old Method - Mapping Flood Hazards Complete certification of

system submitted to FEMA

Mapped as contained within levee system boundaries

Certification submittal not received or incomplete

Traditionally mapped as if the levee did not provide a reduction in flood risk

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What’s New? Interactive stakeholder engagement throughout the

analysis and mapping process:• FEMA will engage community officials and decision

makers in a collaborative discussion

A suite of analysis and mapping procedures of the hazard associated with levees will be reviewed with the interested parties• Intention is to recognize of the uncertainty associated with

hazard identification behind levees.• New Development – Allows communities to split a levee

system into distinct reaches that are analyzed based on the attributes of the specific reach.

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Accredited System Criteria: Entire Levee System or Flood Control Structure meets (or

exceeds) 44 CFR 65.10 Criteria Mapping Approach: Mapping as Fully Accredited; Natural

Valley Floodplain Analysis to Map Shaded Zone X and Levee Protection Note

Risk Analysis Division

—Risk MAP

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Not a Safety Standard The 1% flood event (100-year) is NOT a Safety

Standard Intended for flood insurance Unintentionally encourages communities to seek

this level

Alternative tools to discuss risk and mitigation – risk assessments.

Selection of projects

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Questions or Comments?