[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6434 Introduced in House (IH)]

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114th CONGRESS
  2d Session
                                H. R. 6434

   To provide for more transparent and appropriate reimbursement of 
insurers participating in the Write Your Own program under the National 
            Flood Insurance Program, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            December 5, 2016

 Mr. Pallone (for himself, Mr. Pascrell, and Mr. Payne) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
   To provide for more transparent and appropriate reimbursement of 
insurers participating in the Write Your Own program under the National 
            Flood Insurance Program, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Flood Insurance Reimbursement 
Standards Transparency Cap Profits Act of 2016'' or the ``FIRST Cap 
Profits Act of 2016''.

SEC. 2. IMPLEMENTATION OF OVERSIGHT AND EXPENSE REIMBURSEMENT 
              PROVISIONS FOR WRITE YOUR OWN INSURERS.

    (a) Methodology and Rulemaking.--Not later than the expiration of 
the 12-month period beginning on the date of the enactment of this Act, 
the Administrator of the Federal Emergency Management Agency (in this 
Act referred to as the ``Administrator'') and each property and 
casualty insurance company participating in the Write Your Own program 
(as such term is defined in section 100202 of the Biggert-Waters Flood 
Insurance Reform Act of 2012 (42 U.S.C. 4004)), as applicable, shall 
comply with and complete all requirements under subsections (a) through 
(e) of section 100224 of the Biggert-Waters Flood Insurance Reform Act 
of 2012 (42 U.S.C. 4081 note), as amended by section 3(a) of this Act, 
including issuing a final rule under subsection (d) of such section 
100224, notwithstanding any period of time specified in such section 
100224. The Administrator shall take such actions as may be necessary 
to ensure such compliance.
    (b) GAO Report.--Paragraph (1) of section 100224(f) of the Biggert-
Waters Flood Insurance Reform Act of 2012 (42 U.S.C. 4081 note) is 
amended by inserting ``of this section and section 2(a) of the Flood 
Insurance Reimbursement Standards Transparency Cap Profits Act of 
2016'' before the first comma.

SEC. 3. WYO REIMBURSEMENT METHODOLOGY.

    (a) Limitation on Reimbursements.--Subsection (b) of section 100204 
of the Biggert-Waters Flood Insurance Reform Act of 2012 (42 U.S.C. 
4081 note) is amended by adding after and below paragraph (3) the 
following:
``Any such methodology developed shall provide that such reimbursements 
for any property and casualty insurer for selling, writing, and 
servicing flood insurance policies, and adjusting flood insurance 
claims, including any allowances for profit, shall not in any case 
exceed 110 percent of the aggregate amount of such actual expenses of 
the insurer.''.
    (b) Submission of Methodology to Congress.--Not later than the 
expiration of the 90-day period beginning on the date of the enactment 
of this Act, the Administrator shall submit to the Congress the 
methodology required to be developed under section 100224(b) of the 
Biggert-Waters Flood Insurance Reform Act of 2012 (42 U.S.C. 4081 
note), as amended by subsection (a) of this subsection, or, if such 
methodology has not been completed as of the time of such submission, 
the methodology to the extent so completed and all information in the 
possession of the Administrator regarding the development of such 
methodology.

SEC. 4. NONCOMPLIANCE.

    (a) Timing for Compliance.--If--
            (1) upon the expiration of the 12-month period referred to 
        section 2(a) of this Act, the Administrator has not issued the 
        final rule required under such section 2(a), or
            (2) upon the expiration of the 90-day period referred to in 
        section 3(b) of this Act, the Administrator has not submitted 
        to the Congress the methodology required under such section 
        3(b),
subsection (b) of this section shall take effect and shall apply until 
such final rule has been issued or such methodology has been submitted, 
as the case may be.
    (b) Limitations.--During any period that this subsection is in 
effect--
            (1) the Administrator may not reimburse, or otherwise 
        provide any allowance, payment, or compensation for selling, 
        writing, or servicing flood insurance policies, or adjusting 
        flood insurance claims, including any allowance for profit, to 
        any property and casualty insurance company participating in 
        the Write Your Own program and shall withhold all amounts for 
        such reimbursements, allowance, payments, and compensation; and
            (2) any claim under a flood insurance policy serviced by an 
        insurance company participating in the Write Your Own program 
        shall be adjusted and serviced only by a direct servicing agent 
        of the Federal Emergency Management Agency.

SEC. 5. AWARD OF COSTS OF LITIGATION IN CASES OF WYO FRAUD.

    Section 1345 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4083) is amended by adding at the end the following new subsection:
    ``(f) Award of Costs of Litigation in Cases of WYO Fraud.--If the 
plaintiff prevails in any civil action for fraud or misrepresentation 
by any insurance company occurring in the course of its participation 
in the Write Your Own program (as such term is defined in section 
100202 of the Biggert-Waters Flood Insurance Reform Act of 2012 (42 
U.S.C. 4004)), the court shall award costs of litigation (including 
reasonable attorney and expert witness fees) to the plaintiff.''.
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