[Senate Hearing 114-451]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 114-451


 THE NATIONAL FLOOD INSURANCE PROGRAM: REVIEWING THE RECOMMENDATION OF 
      THE TECHNICAL MAPPING ADVISORY COUNCIL'S 2015 ANNUAL REPORT

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                                   ON

EXAMINING THE TESTIMONY RELATED TO THE REAUTHORIZATION OF THE NATIONAL 
FLOOD INSURANCE PROGRAM AS WELL AS THE RECOMMENDATIONS IN THE TECHNICAL 
                MAPPING ADVISORY COUNCIL'S ANNUAL REPORT

                               __________

                           SEPTEMBER 13, 2016

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs



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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  RICHARD C. SHELBY, Alabama, Chairman

MIKE CRAPO, Idaho                    SHERROD BROWN, Ohio
BOB CORKER, Tennessee                JACK REED, Rhode Island
DAVID VITTER, Louisiana              CHARLES E. SCHUMER, New York
PATRICK J. TOOMEY, Pennsylvania      ROBERT MENENDEZ, New Jersey
MARK KIRK, Illinois                  JON TESTER, Montana
DEAN HELLER, Nevada                  MARK R. WARNER, Virginia
TIM SCOTT, South Carolina            JEFF MERKLEY, Oregon
BEN SASSE, Nebraska                  ELIZABETH WARREN, Massachusetts
TOM COTTON, Arkansas                 HEIDI HEITKAMP, North Dakota
MIKE ROUNDS, South Dakota            JOE DONNELLY, Indiana
JERRY MORAN, Kansas

                 William D. Duhnke III, Staff Director
                 Mark Powden, Democratic Staff Director
       Jelena McWilliams, Deputy Staff Director and Chief Counsel
                Shannon Hines, Professional Staff Member
            Laura Swanson, Democratic Deputy Staff Director
          Beth Cooper, Democratic Professional Staff Member
                       Dawn Ratliff, Chief Clerk
                      Troy Cornell, Hearing Clerk
                      Shelvin Simmons, IT Director
                          Jim Crowell, Editor

                                  (ii)



























                            C O N T E N T S

                              ----------                              

                      TUESDAY, SEPTEMBER 13, 2016

                                                                   Page

Opening statement of Chairman Shelby.............................     1

Opening statements, comments, or prepared statements of:
    Senator Brown................................................     2

                               WITNESSES

Roy E. Wright, Deputy Associate Administrator for Insurance and 
  Mitigation, Federal Emergency Management Agency................     3
    Prepared statement...........................................    27
    Responses to written questions of:
        Senator Toomey...........................................    36
        Senator Menendez.........................................    36
        Senator Warren...........................................    37
        Senator Schumer..........................................    37
        Senator Kirk.............................................    38
John Dorman, Chair, Technical Mapping Advisory Council, and 
  Assistant State Emergency Management Director for Risk 
  Management, and Director, North Carolina Flood Risk Management 
  Program........................................................     5
    Prepared statement...........................................    30
Scott K. Edelman, Vice Chair, Technical Mapping Advisory Council, 
  and Senior Vice President, AECOM...............................     7
    Prepared statement...........................................    34

              Additional Material Supplied for the Record

FEMA--``Technical Mapping Advisory Council Overview''............    41
Letter submitted by Tom Salomone, 2016 President, National 
  Association of REALTORS'............................    47
Letter submitted by Chad Berginnis, Executive Director, 
  Association of State Floodplain Managers.......................    49
Letter submitted by Chad Berginnis, Executive Director, 
  Association of State Floodplain Managers and James M. Drinan, 
  JD, Executive Director, American Planning Association..........    53
Joint letter submitted by American Bankers Association, American 
  Insurance Association, Council of Insurance Agents and Brokers, 
  Financial Services Roundtable, The Independent Insurance Agents 
  and Brokers of America, National Association of Mutual 
  Insurance Committees, National Association of Professional 
  Insurance Agents, and Property Casualty Insurers Association of 
  America regarding the Principles for Flood Insurance 
  Reauthorization................................................    55

                                 (iii)

 
 THE NATIONAL FLOOD INSURANCE PROGRAM: REVIEWING THE RECOMMENDATION OF 
      THE TECHNICAL MAPPING ADVISORY COUNCIL'S 2015 ANNUAL REPORT

                              ----------                              


                      TUESDAY, SEPTEMBER 13, 2016

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10:32 a.m., in room SD-538, Dirksen 
Senate Office Building, Hon. Richard C. Shelby, Chairman of the 
Committee, presiding.

        OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY

    Chairman Shelby. The hearing will come to order.
    Today, we will hear testimony related to the upcoming 
reauthorization of the National Flood Insurance Program, which 
expires next year.
    Today's witnesses will discuss the recommendations in the 
Technical Mapping Advisory Council's annual report. The Council 
was created by the Biggert-Waters Flood Insurance Reform Act. 
Its job is to review matters related to the national flood 
mapping program and make recommendations to FEMA.
    This year's report includes recommendations on how FEMA can 
better communicate flood risk which can form the basis for more 
accurate flood insurance rates. Flood insurance not only helps 
homeowners recover in the event of a flood; it also enables 
communities to reduce flood risk through the adoption of 
floodplain management standards. However, the program cannot be 
successful without accurate mapping and flood risk modeling.
    For years, right here I have advocated for a Flood 
Insurance Program that uses the best science and data to map 
properties so that both the Government and the homeowners fully 
understand the risk of flooding.
    Today, most homeowners do not understand the true flood 
risk to their property. This is due in part to the fact that 
FEMA's rate model was--and still is--based on limited data from 
the early 1970s and nearly half of FEMA's maps remain out of 
date.
    The technology available today is better than ever before 
and will enable us to produce very detailed maps. Such maps, 
overlaid with historical flooding data and state-of-the-art 
modeling, would allow the National Flood Insurance Program to 
more accurately predict flooding risk and price flood insurance 
policies accordingly.
    The U.S. continues to experience repeated and devastating 
flood disasters that have resulted in more than $51 billion in 
payments from the National Flood Insurance Program. $51 
billion. In fact, the recent flooding in Louisiana is 
anticipated to cost more than $1 billion, making it the fourth 
largest disaster in the history of the program.
    These record-breaking disasters have required the program 
to borrow $23 billion from the U.S. Treasury to pay claims. If 
we want to ensure the long-term viability of the NFIP without 
borrowing from the Treasury, flood insurance rates must 
accurately reflect risk. The basic Flood Insurance Program has 
not changed substantially since 1968.
    I am hopeful that this report will spur the change that is 
long overdue.
    Senator Brown.

               STATEMENT OF SENATOR SHERROD BROWN

    Senator Brown. Thank you, Chairman Shelby, for calling this 
hearing today and for your always prompt beginning of the 
hearing.
    Flooding is the most common and most costly natural 
disaster facing our country. With a growing population and a 
changing climate, our entire Nation--not just the coastal 
States--will continue to grapple with this issue. It will have 
a direct impact on Ohioans and other Americans who live in or 
near floodplains. It will also have an indirect impact on all 
taxpayers no matter where any of us live.
    The people of Louisiana experienced historic, devastating 
flooding in August from a storm that dumped as much as 2 feet 
of rain in just about 48 hours. Thousands of homes and 
businesses were destroyed; at least 13 people died. The cost is 
so far very difficult to calculate.
    Some homeowners and businesses had flood insurance policies 
to help their recovery. Many others did not, possibly because 
it was not required or because they assumed they were safe 
outside of the 100-year floodplain.
    I hope to get an update from Deputy Associate Administrator 
Wright on how the NFIP is responding to the devastation in 
Louisiana.
    In addition, given the significant concerns that have been 
raised around FEMA's claims process, I want to hear more about 
FEMA's ``Transformation'' effort to improve the NFIP following 
Superstorm Sandy and how that is working for policyholders in 
Louisiana.
    I also view today's hearing as the first step in a 
comprehensive examination of the program leading up to its 
reauthorization in 2017.
    The National Flood Insurance Program seeks to combat the 
effects of flooding through its three interrelated components:
    One, flood insurance, to help property owners recover 
quickly after a flood and reduce the need for Federal emergency 
appropriations;
    Two, floodplain management, to minimize damage to people 
and property through mitigation and local ordinances;
    And, three, floodplain mapping.
    By identifying and mapping flood hazards, floodplain 
mapping underpins both the insurance and the mitigation 
components of the program.
    The subject of today's hearing goes to the heart of 
something both familiar and vital to us all: our homes and 
communities.
    Just ask the people of Louisiana.
    We need to focus on ways to keep people and property out of 
harm's way and help them bounce back when disaster does strike.
    We also need to make smart investments in infrastructure 
and mitigation to make our communities more resilient and to 
save taxpayer dollars today and in the years ahead.
    Accurate understanding and communication of the flood risks 
we face is critical to those decisions.
    Congress recognized the importance of accurate maps in our 
2012 NFIP reauthorization, when we authorized increased funding 
for FEMA's flood mapping and established the Technical Mapping 
Advisory Committee to provide expert advice on improving 
mapping for current and future conditions.
    Our witnesses today will discuss TMAC's recommendations. I 
hope to gain an understanding of the time, resources, and any 
congressional actions that will be necessary to make them come 
about. I hope this hearing brings that to us.
    Mr. Wright, I understand that the short notice of today's 
hearing did not permit you to submit advance written testimony 
as is called for in the rules of the Committee. I hope you will 
be submitting that testimony for the record.
    Mr. Wright. I will, sir.
    Senator Brown. Thank you.
    With that, I welcome the witnesses, and I look forward to 
hearing the testimony of all three of you on this important 
topic.
    Chairman Shelby. First, we will receive the testimony of 
Mr. Roy Wright, Deputy Associate Administrator for Insurance 
and Mitigation for the Federal Emergency Management Agency.
    Next we will hear from Mr. John Dorman, who serves as the 
Chair of the Technical Mapping Advisory Council. He is also the 
assistant State emergency management director for risk 
management for North Carolina.
    Last, we will receive testimony from Mr. Scott Edelman, the 
Vice Chair of the Technical Mapping Advisory Council. Mr. 
Edelman is also the senior vice president for North America for 
AECOM Water Resources. Is that right?
    We welcome all of you today. Your written testimony will be 
made part of the hearing record in its totality. We will start 
with you, Mr. Wright.

STATEMENT OF ROY E. WRIGHT, DEPUTY ASSOCIATE ADMINISTRATOR FOR 
 INSURANCE AND MITIGATION, FEDERAL EMERGENCY MANAGEMENT AGENCY

    Mr. Wright. Good morning, Chairman Shelby, Ranking Member 
Brown, and Members of the Committee. I am Roy Wright, and I 
serve as that Deputy Associate Administrator. Thank you for the 
opportunity to testify about FEMA's Technical Mapping Advisory 
Council--the ``TMAC,'' as we will call it--the recommendations 
it has provided to FEMA, and our progress addressing those 
recommendations.
    As indicated by their name and clearly stated in the TMAC 
charter, the Council is an advisory board established to advise 
and make recommendations to the FEMA Administrator and the 
flood mapping program. The Council's recommendations aid FEMA 
in furthering our efforts to provide communities with the best 
available data and tools to make better informed decisions that 
reduce the risk and consequences of flooded across our Nation.
    These recommendations in the mapping field complement our 
endeavors elsewhere in the National Flood Insurance Program. 
Mr. Brown asked about the transformation we are doing for the 
customer, experienced policyholders, really a generational leap 
forward that we are taking on our actuarial and claims 
underwriting processes; ensuring that policyholders, like those 
that we serve in Louisiana, get their claims paid accurately 
and quickly.
    We can talk more about this, but I will highlight inside of 
the first 30 days, almost 29,000 claims have been filed, more 
than $300 million in advance and early payments have moved out 
to insured. This is a pace that has never been seen in the 
history of National Flood.
    To the TMAC, FEMA fundamentally agrees with the intent of 
all 22 of the recommendations in the 2015 annual report. As I 
look at those recommendations, I kind of see them in three 
streams: there are those of a technical nature that can be 
addressed through our normal policy updates; a second group 
that are probably a stretch for our program, but they can be 
accomplished with current science and resource levels; and, 
third, a transformative set that requires the science to evolve 
and resource levels that may not exactly be knowable today.
    Over the last several months, we evaluated each and every 
one of these recommendations to understand resource 
requirements and impacts to inform implementation, priority 
sequence, and investments.
    Perhaps the most transformative recommendation made in the 
TMAC 2015 report is to transition from the 1-percent annual 
chance as the basis for flood insurance ratings to a structure-
specific flood frequency determination. This recommendation 
will require an entirely new approach to insurance rating and 
underwriting, including new regulatory hazard and risk 
products. It could also have cascading effects on floodplain 
management standards in communities.
    In January 2016, the TMAC also delivered its Future 
Condition, Risk Assessment, and Modeling report looking beyond 
today's risk. The recommendations there really have tried to 
push us in ways that drive past what is currently practiced, so 
putting our agency in a position to address and inform future 
building in the country.
    This summer, the TMAC submitted the 2016 Flood Mapping 
Program Review as required under Section 17 of the Homeowners 
Flood Insurance Affordability Act of 2014. This report included 
a set of recommendations to further advance the program's 
credible flood hazard data into the future. Based on the advice 
from the TMAC and my recommendation, the Administrator has 
certified the flood mapping program as credible.
    We have already begun implementing the technical 
recommendations that we can address through policy. We continue 
to make strategic investments like high-resolution topography, 
structure-specific data sets, and enhanced flood models; and 
are laying out the planning that we need to lay the foundation 
for this transformative work going forward.
    Those transformative pieces, including the TMAC's 
recommendation to transition away from the 1-percent annual 
chance to provide the structure-specific risk information, will 
necessitate additional research and planning, internally and 
with our partners.
    This said, to the Chairman's point, we need to meet these 
transformations in flood hazard analysis with complementary 
leaps forward in our actuarial and underwriting practices. I 
consider this new approach to insurance rating and underwriting 
crucial to the program. Simply, we need to set premiums that 
best reflect the risk.
    While the flood risk analysis is essential, nothing is more 
powerful to communicate risk than a pricing signal. These 
initiatives and investments will be critical as FEMA assesses 
how we move away from being able to support kind of a big event 
understood to understand the whole manifold of events that can 
take place. We have got to move to structure-specific flood 
frequencies, and eventually we need to actually see the 
actuarial structure of the program fundamentally shift.
    I appreciate the extraordinary time invested by the 
Technical Mapping Advisory Council. Their hard work and 
dedication will serve this program well. I am happy to address 
your questions, and thank you, Mr. Chairman.
    Chairman Shelby. Mr. Dorman.

  STATEMENT OF JOHN DORMAN, CHAIR, TECHNICAL MAPPING ADVISORY 
COUNCIL, AND ASSISTANT STATE EMERGENCY MANAGEMENT DIRECTOR FOR 
   RISK MANAGEMENT, AND DIRECTOR, NORTH CAROLINA FLOOD RISK 
                       MANAGEMENT PROGRAM

    Mr. Dorman. Thank you, Chairman Shelby, Senator Brown, and 
Members of the Committee for the opportunity to come and 
provide a perspective on the 2015 Technical Mapping Advisory 
Council. As noted, I am John Dorman. I am the North Carolina 
assistant State emergency management director for risk 
management--that is a mouthful--and also the director of the 
Flood Risk Management Program.
    Necessity is the mother of all innovation. That is an 
English proverb that speaks well to the overall tenet of the 
TMAC recommendations. FEMA has diligently overseen the 
generation of the current flood maps that focus more toward the 
hazard. However, transformational strategies must be 
implemented to address the needs of the country and the 
program, such as insurance rates that reflect structure-
anticipated flood loss; communication that focuses on financial 
loss as opposed to just an ``in and out''; and homeowners' 
understanding of and confidence in the data used for flood 
hazard determination and insurance premiums.
    For North Carolina, Hurricanes Floyd, Francis, Ivan, and 
Irene all demonstrated and compelled North Carolina to the need 
for implementing transformational strategies. Thus, North 
Carolina has successfully implemented the ability to generate 
structure-based flood probability; structure-based flood risk 
assessments; structure-based real-time impact and warning; and 
structure-based, risk-based insurance rating. We are doing 
that. Recent events across the country have again shown a lack 
of accuracy and awareness of structure-specific flood risks 
that both large storms and localized flash flooding can 
present. With these needs ever apparent, I believe TMAC has 
constructed recommendations that, if implemented, will 
transform the program and improve the Nation's resiliency to 
flooding. While there are 22 recommendations, I would like to 
quickly speak to four of those that will be transformational.
    First--and you have heard this before--fundamental to 
accurate flood hazard identification and risk assessment is 
accurate, high-resolution elevation data. Recent developments 
in data collection technologies offer the most accurate and 
efficient collection of ground elevation possible. Technology 
such as Geiger LiDAR sensors collect data at both a higher 
altitude and higher accuracy allowing for faster acquisition 
and a lower cost of acquiring and processing the data. This 
higher-resolution data also allows the opportunity to meet 
other needs of other stakeholders--such as the Department of 
Transportation and Utilities--that allow stakeholders to play a 
part in sharing the cost.
    Second, the transition from a 1-percent or 100-year flood 
delineation and its elevation to a structure-specific annual 
chance frequency with elevation is critical for the awareness 
of every property that is in the flood zone, and it is, of 
course, interesting to note that 26 percent of all flood claims 
occur outside of the 100-year flood line. The recent events in 
Louisiana demonstrate the importance of altering our Nation's 
mentality that one is safe if they live outside of that line on 
to a raised awareness of flood prevention at the structure 
level.
    Third, the transitioning to a focus of structure-based risk 
assessment. This increased level of detail that calculate 
structure-specific percent chance of flooding and estimated 
annualized damage calculations can inform mitigation decisions 
and create more accurate risk-based insurance premiums. This 
will directly result in mitigation actions to reduce losses, 
lessen the financial burden of the Federal Government to help 
communities recover from disasters, and create a more 
financially sound FIMA.
    Finally, we must transition to a dynamic, queried display 
of data, models, maps, and risk assessments. I will just say I 
have seven children, and most of them are in the Millennial 
generation, and as we have seen, the Nation has changed in how 
it looks at and demands data. We must create a more robust 
database that enables data to be dynamically queried and 
displayed on the Web site. Floodplain modeling and mapping is 
an ever changing science, based largely on the statistics and 
the changes in land use and topography. We need to create an 
efficient methodology to quickly and efficiently update flood 
hazard and risk information and provide that at the fingertips 
of the end users on all types of devices.
    I want to point out that all or some of the four 
recommendations I have just mentioned have been successfully 
implemented in four States. These recommendations are not ideas 
or pie-in-the-sky. They are proven concepts that are 
operational today.
    Thank you again for the opportunity to address the 
Committee on this important topic. I would be willing and happy 
to answer any questions you may have.
    Chairman Shelby. Mr. Edelman.

 STATEMENT OF SCOTT K. EDELMAN, VICE CHAIR, TECHNICAL MAPPING 
       ADVISORY COUNCIL, AND SENIOR VICE PRESIDENT, AECOM

    Mr. Edelman. Good morning, Chairman Shelby and Members of 
the Committee. I am Scott Edelman, senior vice president of 
AECOM. I have spent my career solely focused on solving our 
Nation's water-related opportunities and challenges. I 
appreciate this opportunity to appear before the Committee on 
Banking, Housing, and Urban Affairs.
    I have been involved with creating maps for FEMA since 
1981, and I am privileged serving as Vice Chair on the 
Technical Mapping Advisory Committee established by the 112th 
Congress. We as a Nation have simply endured too much pain and 
suffering due to floods.
    I believe that Roy Wright's strong support and 
encouragement of the TMAC has resulted in two reports that show 
a path to the next evolution of the NFIP. In the future, I 
believe that if the recommendations of the TMAC reports are 
supported by Congress and the Administration, we can make 
significant strides to reduce both the pain and suffering that 
our citizens are enduring at a record level and the burden 
these unprecedented events continue to drain resources from our 
U.S. Treasury.
    Of the 29 recommendations contained in the TMAC 2015 
reports, I believe that the three most important priorities and 
potential benefits are:
    First, the reintroduction of a 5-year rolling plan, to 
allow leveraging of Federal dollars;
    Second, the movement to structure-based risk assessments, 
to create a safer Nation;
    Third, preparing the Nation for future conditions, to stop 
building new problems.
    First, the reinstatement of the 5-year rolling plan allows 
the leveraging of local and State dollars. FEMA cannot make the 
Nation a safer place alone. The operating principles of FEMA's 
Whole Community doctrine is critical as applied to flood-
related mitigation. Flood waters know no jurisdictional 
boundaries as they devastate lives and property, and, 
therefore, we need to fully engage local communities and make 
these shared responsibilities more apparent to all. When 
Congress funded Map Modernization in 2003, FEMA produced the 
Multi-Year Flood Hazard Identification Plan, MHIP. MHIP 
addressed every county in the Nation with when and how much 
anticipated funding would be available. The result was an 
enterprise-wide approach to maximize the return on Federal 
investments in which FEMA served as the chief risk officer to 
those investment in the studies, and communities felt strong 
local ownership of the studies and results. This approach 
better aligned FEMA with State and local efforts to reduce the 
loss of life and property.
    Second is structure-based risk assessments. We must change 
the perception that if I am just on the other side of the 100-
year flood line I am safe. Too much time is spent trying to 
justify the movement of the flood line by a few feet when in 
actuality the risk of flooding of the structure only has 
changed ever so slightly. Much of the problem is due to 
uncertainty of the line itself.
    To my knowledge, this is the only product that engineers 
produce and communicate to the public that deals with averages 
and not what is safe.
    We also have a great deal of uncertainty within the 
calculations. In all actuality, the current 100-year average 
line shown on the flood maps is probably closer to a safe 
design of a 10-year event.
    Moving to a structure-based risk assessment begins to 
change the conversation from one focused on ``in versus out'' 
to one that starts to communicate levels of risk. We must also 
take into account affordability and grandfathering with sunset 
clauses to take into account our most vulnerable communities 
and constituents.
    Third, we need to prepare the Nation for the future. GAO 
asked FEMA to evaluate the impact of future conditions on the 
National Flood Insurance Program. The report concluded that by 
the year 2100 on average our floodplains are going to increase 
by 45 percent, the number of polices we have are going to 
increase by 80 percent, and the average loss per policy in 
today's dollars will increase by 50 percent. This is an immense 
challenge to our country. We need to encourage local 
communities to adopt higher standards on a volunteer basis, 
understanding that the higher standards results in less loss of 
life. Many communities have done this, including Mecklenburg 
County and the city of Charlotte. Based on their adoption of 
future conditions elevations, Mecklenburg County has estimated 
savings from flood damages from a single 100-year event to be 
over $150 million. We need to stop building future problems so 
we can fully concentrate on mitigation of existing problems.
    My passion is not solely on the science but the need to 
help the Nation with this longstanding challenge and the 
billions of tax dollars that are unnecessarily wasted because 
of poor land use decisions and the attempt to tame or ignore 
Mother Nature.
    I want to again thank the Committee for this opportunity. I 
urge Members of the Committee to refer to the two TMAC reports 
for more detail as a formal part of our testimony.
    I would be happy to answer any questions you may have.
    Chairman Shelby. I will ask all of you this: In your view, 
does the Flood Insurance Program accurately map, price, and 
communicate flood risk to homeowners in communities? Mr. 
Wright, does it or does it not?
    Mr. Dorman. I believe it does present it in a way that is 
consistent. I would tell you that there is so much more 
potential related to making it more precise. It can be 
actuarially sound for the 80 percent of the policies that are 
in that space, but there is significant ability for us to 
improve.
    Chairman Shelby. Mr. Dorman.
    Mr. Dorman. Sir, I believe the guidelines and standards 
that are being followed does allow for the making of 
appropriate maps. I do believe that the relationship between 
the individual and the insurance rater is the most important 
component to that, and I would say that they would feel it is 
not adequate. But for the level of data that they currently 
have, I believe it is meeting its need.
    Chairman Shelby. Mr. Edelman.
    Mr. Edelman. We have two challenges with the 100-year flood 
line, first as it deals with averages. As engineers, when we 
communicate numbers to the public, we deal in what is safe. If 
a 20-ton truck was going to go over a bridge that is supposed 
to be safe for 20 tons, you expect to put thousands of trucks 
over that every time and not have the bridge fail. The standard 
that we are using on the maps, though, is that every other 
truck would fail that bridge. So we are communicating that 
wrong.
    Second is uncertainty. We are a very young Nation. We have 
gauge records of 20, 40, 60 years that are trying to predict 
something that is 100 years out. If I was going to do the 
engineering on the Nile River, I would probably have thousands 
of years of records I could use. This uncertainty creates a 
large unknown such that our elevations many times could be many 
feet higher or lower than what is shown on the maps.
    Chairman Shelby. The chance of flood determinations, Mr. 
Edelman, the report recommends that the National Flood 
Insurance Program move away from identifying the 1-percent 
annual risk to a structure-specific flood frequency 
determination and associated flood elevations. This 1-percent 
determination has been in place since the creation of the 
program. What are the specific differences between the two 
approaches? And how would the program change under the 
structure-specific determination methodology? And what is the 
downside here? Because a lot of the stuff we have today is not 
working.
    Mr. Edelman. You are absolutely correct, Mr. Chairman. The 
problem that we have today is this in versus out mentality, 
that if you are just a few feet outside the 100-year line you 
are safe. What we are proposing is that all structures have 
some level of risk. If you are built on the top of a hill, your 
risk is going to be very low. But if you are just really close 
to that line, you still have risk. And we need to have a 
graduated system for moving through this.
    The challenge that we are going to have is not so much on 
the technology. We can do this today. We know how to do this. 
The challenge will be with the implementation of how do we then 
move the program from the current position to this new world, 
and I believe we are going to have to do this with 
grandfathering, with sunset clauses that may take 10 or 20 
years to fade on out to make this accurate.
    Chairman Shelby. Senator Brown.
    Senator Brown. Thank you.
    Mr. Edelman, you used the phrase in your testimony, ``We 
must change the perception,'' and I want to ask you and Mr. 
Dorman a couple of questions, and you can go first, about how 
we communicate flood risk to consumers. When most people think 
about flood risk, when they think about NFIP, they think about 
whether they are in or out of the 100-year floodplain, assuming 
they are not at risk if they are outside of that zone. You have 
both intimated that. What exactly does the notion of the 100-
year floodplain obscure for consumers? And by that, you know, 
how do we better communicate with people so that they 
understand better their flood risk and insure their properties 
appropriately? How do we communicate that? Mr. Edelman, if you 
would start on that.
    Mr. Edelman. OK. We can identify that by being structure-
specific. What people want to know is what is the risk of my 
property, of my building, not so much what is generally 
happening in my neighborhood or my town. So we have to be very 
structure-specific to do that, and by allowing people to use 
the latest technology to click on their individual house to see 
what that risk is.
    Senator Brown. Mr. Dorman.
    Mr. Dorman. Well, I can speak for North Carolina. What we 
have done is we have collected first-floor elevations for all 
properties in the 100-year flood zone. And when there is a 
flood and it starts flooding inside that property, there is a 
financial cost to them. At the current pace we have, all we 
know for homeowners is you are either in the 100-year or not, 
whether you are going to flood more frequently or whether you 
are not. So everyone at the current time sees either a 100-year 
event, it is going to happen to me or not.
    So what we have done in North Carolina and I believe what 
the TMAC is proposing is that for each individual property we 
determine at the 100-year or different levels of frequency what 
the financial cost will be to the individual. That, from my 
perspective, speaks very clearly to an individual what they 
need to do to cover themselves.
    Senator Brown. Specifically, what Mr. Edelman said, you 
designate each structure with--attach the flood risk to each 
structure.
    Mr. Dorman. And the financial damage that will occur from 
that.
    Senator Brown. OK. Mr. Wright, NFIP came under fire for its 
management of the Sandy claims process. You talked about the 
good news of the unprecedented response to Louisiana. Tell me 
what lessons you learned from Superstorm Sandy and your 
response and what steps you have taken to improve it.
    Mr. Wright. So, clearly, there was the scale of Sandy, 
144,000 claims, $8.5 billion that was paid out initially. And 
as this Committee's investigation pointed out, there were 
plenty of stumbles in terms of how that is done, and part of 
the charge that Administrator Fugate has given to me is to set 
that back to right. At this point, 97 percent of those files 
that requested review have been reviewed; 80 percent of those 
offers have been made; and we are wrapping that up here in the 
weeks to come.
    But fundamentally for me, what it did was to force us to 
step back and say the relic of this program, much of which you 
can tie back to 1986 and 1999, had to change. So we saw this in 
what we did in Louisiana. I was on the ground very early. I 
have been down there twice. We have been in folks' homes. 
Folks, where they have an insurance policy, want to know that 
the money is coming. We push the money. Again, it does no 
change the overall claim amount, but get those dollars so that 
they can begin their own repairs, ensuring that they have an 
off ramp when they get frustrated and confused.
    So I have been out in the press, and we have been pushing 
these things. If you are not getting the answer you want from 
the insurance company, do not wait until the end. Come to us. 
We have added a tremendous amount of oversight in terms of 
quality control, tripled the amount that has historically been 
done in the program, far more transparency, not only about from 
the company's data but--in spite of the fact that the State 
insurance commissioner does not regulate my program, I 
volunteered to provide all of my information related to our 
performance to the State insurance commissioner. So if you have 
got problems, let us know.
    Some of this is about simplification. This will be the 
first event that will be able to fully avail itself of our new 
appeals process. I think one of the big things I learned from 
Sandy is if we would have had a robust and fair appeals 
process, we could have addressed concerns as they came our way. 
The prior regime that was in place just was not credible 
enough. I could say more, but----
    Senator Brown. What did you mean when you said make sure 
that there is an off ramp when a homeowner is confused?
    Mr. Wright. When someone files a claim, we tell them to 
call their agent or their company, and we sell through 80 
different companies that are out there, and that is the first 
place to go to file your claim. But this program is 
underwritten by the Federal Emergency Management Agency, and so 
if I have a customer or a policyholder who has been frustrated 
by their company, somehow something got dropped, this is my 
program at the end of the day. And what we have done is said, 
``You call me.'' And I am out there. You call 1-800-621-FEMA, 
and you push number 2 for flood insurance, and you get to 
someone so that we can resolve this. You should not have to 
wait.
    Senator Brown. Good. Thank you.
    Thanks, Mr. Chairman.
    Chairman Shelby. Senator Scott.
    Senator Scott. Thank you, Mr. Chairman. Good morning to the 
panel. Thank you all for being here. Mr. Wright, good seeing 
you again.
    Just one quick question on the Sandy crisis. What 
percentage of homeowners had flood insurance in that area?
    Mr. Wright. So I do not have great insight into that. Give 
me a little moment to kind of explain. I know how many flood 
insurance claims I have. No question about that. But FEMA does 
not retain data on structures and properties across America. So 
we have approximate pieces.
    I know at a hearing with both you and Mr. Vitter in July, 
we talked a bit about this, and one of the elements that I have 
worked on since then is, as part of our broader affordability 
work, we are going and doing some data matching with the Census 
Bureau, where we are taking our 5.1 million policies and 
bringing in some of the census data, because we need better 
answers to this question about how many structures are in 
versus out.
    Senator Scott. So you have no clue on the percentage of 
homeowners----
    Mr. Wright. We have a series of studies that range----
    Senator Scott. Mr. Wright, let me ask you a quick question.
    Mr. Wright. I apologize.
    Senator Scott. Because, unfortunately, 5 minutes is not as 
long in Washington, DC, as it is other places. You do not have 
a clue at this point, and perhaps you can provide that to me, 
because here is my point: My answer--I spent, as you know, 20 
years in the insurance business, and so my assumption is that 
the answer is, ``Not many.'' And because the answer is like, 
``Not many,'' when I look at my State and the flood insurance 
mapping that is going on right now, when we look in Horry 
County specifically--a 1,000-year flood just occurred in South 
Carolina. We know that most of it was in the middle of the 
State. Unfortunately, part of the consequences of the flood 
mapping and using the 100-year model is that there are places 
in Horry County that will now have to have flood insurance that 
did not flood even during a 1,000-year flood. Perhaps an 
additional 35,000 houses will need flood insurance even though 
they are not, according to the 1,000-year flood, in real 
danger, with an increased premium of around $6,000. Said 
differently, for the homeowner who has a mortgage, that could 
be about another $500-a-month in your mortgage premium. A 
substantial increase.
    I know that there is no way that FEMA takes into 
consideration low-income houses and the impact that the mapping 
would have on their ability to keep their homes. It is probably 
impossible for that to be an expectation. What concerns me, 
however, is knowing that one of the worst disasters from a 
flood perspective occurred really outside of an area that 
anyone would anticipate flood insurance, it does lead to a 
logical conclusion that many folks who have flood insurance 
will be absorbing the price and the responsibility of flooding 
in places where you just cannot model it.
    A part of that process has created much concern in Horry 
County because, while it is a 10-year remapping process, it is 
a 90-day appeal. And in those 90 days, you have to--according 
to my friends in Horry County, the community has to develop 
hydrology, hydrologic data and analysis, in order to appeal 
what took 10 years on one side, you only get 90 days on the 
other side. And, frankly, the information that we use to create 
pricing, according to my folks who did not experience flooding, 
is at best inconsistent with the realities that they have 
experienced for the last couple hundred years.
    Mr. Wright. So a couple of key points. All of the mapping 
efforts that you are discussing have been in motion for a 
number of years, most of them for less than 10 but for a number 
of years, and the event from last fall, we did not go back and 
redo the work, so it is based on the 1-percent annual chance 
from a prior cycle.
    To the point about the price, in every instance, given the 
direction in the 2014 legislation that was passed and signed 
into law, anyone who is coming in is not getting the $6,000 
price. They are actually coming in at a newly mapped rate. That 
average is between $300 and $500, depending on the level of 
coverage. They do escalate over time, but they are coming in at 
a much lower rate.
    I think to the appeal question, I think it is very 
important. What I will assure you of is we have been sharing 
the data with the community throughout the process. They do not 
just get it at the end. In fact, they have a number of 
instances where the community gets a preview of it, and it 
says, ``Do you want to give us additional information? Do you 
have things that would change it?''
    The 90 days per se related to that appeal period is set in 
statute. And so what we have done very intentionally is work a 
long way on the front side so there are no surprises, so that 
when the 90 days starts that is set in statute, folks are 
primed to play.
    Senator Scott. I am out of time. I will just end my 
comments with one comment as opposed to a question, and Mr. 
Vitter made this point during our small business hearing when 
you were there to testify. I recognize that the average price 
of flood insurance is under $1,000. I have flood insurance at 
my home, and I am 30 miles outside of Charleston. I will tell 
you that in some areas--and I think one of the examples that 
you used was the flood insurance premium was somewhere over 
$25,000. So we are not talking about a $300 to $500 average 
premium. We are talking about the outliers that are becoming 
more of--less of an anomaly and more baked into the reality of 
many homeowners. And I do not know many homeowners who can 
afford what some will experience in Horry County--maybe not 
all, but more than a few--a $6,000 premium, which is going to 
be hard to absorb, and it would be great if we could find a way 
to take that into perspective and context as we think about 
flooding and disasters going forward.
    Thank you.
    Chairman Shelby. Senator Tester.
    Senator Tester. Thank you, Mr. Chairman, and I want to 
thank you and Senator Brown for holding this hearing.
    Before I get to the witnesses, I want to speak about a 
bill--and Senator Heller was here earlier--than Senator Heller 
and I have. We have been working on it. It is called the 
``Flood Insurance Market Parity and Modernization Act.'' It is 
an important bill that will offer consumers flood insurance 
options, and I think it will help NFIP remain viable over the 
long haul. It will introduce private insurance into the 
marketplace under the supervision of State insurance 
commissioners. It was introduced in the House by Murphy and 
Ross. It passed the House 419-0, which is an unusual thing for 
the House to do. But the fact is I think it speaks of the 
support of this bill, and I would love to see the Committee 
take this up because I think it is something that could help. I 
know that there are Members of this Committee who oppose it, 
but that is what hearings are about, hammering out the 
differences. And so I just bring that up because I think it is 
important.
    You know, this hearing should be held in front of the 
Energy Committee. Things are changing. Here are some things 
that I heard in the testimony: a pace never seen before in 
National Flood, the growth; 26 percent of the claims are 
outside the flood lines; in 83 years, our floodplains are going 
to increase by 45 percent. And then I heard premiums need to 
reflect risk; otherwise, the taxpayer pays for it.
    And, quite frankly, this puts us in a conundrum because, as 
Senator Scott said, we have--you know, we have got people who 
cannot afford these kind of claims. By the same token, if we 
want to talk about fiscal prudence, we cannot expect the 
taxpayers, as we see these claims go up and up and up and up 
and up and up and up, and billions and billions of dollars--I 
think the Chairman said Sandy was a billion bucks. That is 
probably going to be a cheap one next year. Who knows?
    So I appreciate the work you do, and it puts us in a 
difficult situation because I think most of us believe the 
premiums need to reflect the risk, but we do not want to 
premium people outside their homes, which means we need to come 
to the realization that things are changing in our climate, and 
they are changing quickly, and more quickly than we can adapt 
to them in a reasonable way. And if we are going to continue in 
this body of the U.S. Senate to have policies in this country 
that promote climate change, we had better get the wallet out, 
and we had better expect the taxpayers and our next generations 
to pay a lot of money. That is my editorial comment.
    Now I want to talk to you, Mr. Wright, about--by the way, 
could you give me some figures on what is happening-- how long 
have you been with the agency?
    Mr. Wright. I have been with the agency for 8 years. I have 
been in this role for 15 months.
    Senator Tester. OK. So it would be unfair. I am going to 
ask your agency to see what FEMA's budget has done over the 
last 20 years. My guess is it has probably grown not just 
double but a hell of a lot more than that.
    Mr. Wright. There has been an up-and-down swing--we will 
get you some numbers--in both the Disaster Relief Fund as well 
as the base funding for the programs.
    Senator Tester. OK. Thank you.
    We have an issue in Montana on levees. It used to be that 
the Army Corps would give FEMA information and--and correct me 
if I am wrong--they would accredit those levees. The Army Corps 
decided they were not going to do that anymore because they 
said they do not have the budget capability of doing these 
accreditations and, quite frankly, the liability is too high, 
which puts the communities in a position where they cannot 
afford to do the accreditation. And it puts you in a position 
that you cannot afford to make the decision as to whether it is 
a viable levee or not without that information.
    Could you talk to me, is the relationship between FEMA and 
the Army Corps when it comes to levees, is that over with? Or 
are you still working with these guys? Can you work with them? 
Are they offering you information? Give me an idea what is 
going on.
    Mr. Wright. So we work very closely with the Army Corps of 
Engineers. I think if you go back 5, 6 years ago, I think that 
that relationship needed a tremendous amount of work, and we 
have repaired it in that period of time.
    You point out their resourcing issues, so they have three 
different kinds of analysis that they do of levees. Their top 
tier one meets everything we need, but they do not do those 
very often. Their bottom tier one, which they do all the time, 
meets very little of the needs that we have.
    And so under our regulations, the primary responsibility 
for levee certification belongs to the levee owner. In many 
instances, the Corps built them and then turned them over to 
the local sponsor.
    There are a few changes that I have put in place. One of 
them is to work very closely with the local levee districts or 
authorities so that we can give appropriate credit for however 
much protection it does provide. Simply telling me that, you 
know, this levee has done very well for the last 40 years is 
not sufficient. In some instances, I have spoken with levee 
board members, and I have said, ``Have you drilled a boring in 
this in the last 40 years? Have you checked for safety?''
    Senator Tester. Right.
    Mr. Wright. And they go, ``No.'' You know, that is one of 
those pieces that from a safety perspective is concerning to 
me.
    Senator Tester. Yes.
    Mr. Wright. And so what I have got to do is find the best 
kind of balance of how do we work with them, and we have made 
partial credit more feasible in terms of how it reflects, but 
there is a cost to that certification.
    Senator Tester. Well, I appreciate your work, Mr. Wright, 
and I appreciate the work of all the folks on this panel, and I 
appreciate your testimony even though I was focused more on Mr. 
Wright than the rest of you. But I would just say that if there 
is stuff coming down the pipe where you need help to make this 
happen--because it is not happening, and we are putting a lot 
more folks in the floodplain because of that--not in all cases. 
I should not make a blanket statement. You know what I mean, 
Roy.
    Mr. Wright. I do.
    Senator Tester. Thank you very, very much.
    Mr. Wright. Thank you.
    Chairman Shelby. Senator Vitter.
    Senator Vitter. Thank you, Mr. Chairman. Thanks to all of 
you for your important work in this area.
    I first want to underscore the significance of the recent 
Louisiana flooding. I think it was really, unfortunately, 
underreported in the national news for various reasons--a lot 
of other things going on, the Olympics, the Presidential race. 
And I think it is underappreciated in this body. We were away 
on the August recess. But by any metric, it was the most 
significant disaster since Sandy. Red Cross confirms that; FEMA 
confirms that.
    There have been over 138,000 individual FEMA claims. That 
compares to flooding in northern and central Louisiana earlier 
this year. That was very significant, under 40,000. Flooding in 
South Carolina last year that was very significant, about 
26,000. So it was literally a 1,000-year flood event. It was a 
big event. And, unfortunately, only about 22 percent of those 
flooded had flood insurance, not because they did not meet some 
requirement or some notion of what was the prudent thing to do; 
rather, they were way outside what was understood as any sort 
of flood zone.
    Mr. Wright, thank you for your work and for FEMA's work. Do 
you want to make any quick comment on the significance of the 
event and also the percentage of those uninsured?
    Mr. Wright. Absolutely. As I look back at the last dozen 
years, this one is number four on the list. I have got Katrina, 
Sandy, and then Hurricane Ike from 2008. From a pure policy 
count number, it is number four in line. It is in a riverine 
area, more inland. And as I walked through some of the 
neighborhoods, and particularly in areas inside the special 
flood hazard area first, there were a tremendous number of 
rental homes by which the landlord presumably had it paid off, 
they did not carry flood insurance, and the renter did not 
flood insurance. There was one block where only one out of 
eight of those homes had flood insurance, yet they were all 
inside.
    I would then also speak to those beyond. So I look at some 
of the things--I always get in trouble when you call out 
parishes, but I looked particularly at East Baton Rouge and 
Livingston parishes where we saw a tremendous amount outside. 
Those folks clearly saw the 1,000-year event. And so as you see 
that structure--I look at the counts particularly in East Baton 
Rouge and the kind of concentration of that. This absolutely is 
a devastating event.
    Senator Vitter. Thank you. I just want to underscore that 
because the Administration is going to properly make an 
emergency request. But, again, 78 percent of those affected, no 
flood insurance, not because they did something wrong but 
because the great majority of them were way outside what was 
identified as any sort of flood area.
    To go to this mapping issue, Mr. Dorman, thank you for your 
work. You point out in your testimony the good work of North 
Carolina as well as Alabama and Virginia in their use to the 
Flood Risk Information System, and there are similar ways of 
going about obtaining that much greater level of clarity and 
accuracy. In layman's terms, what do other States and the 
Federal Government have to do to capture that level of real-
time and property-specific understanding?
    Mr. Dorman. Well, I would say a couple things:
    Efficient use of technology. This same set of LiDAR data 
can give you building footprints. North Carolina collected 5.2 
million building footprints to know where the buildings are 
located. The LiDAR technology does that. It also gives you 
first-floor elevation.
    Partnerships--partnerships where North Carolina has worked 
with our local governments to give us all the tax parcel 
information that we tie to the buildings.
    So, Senator, I would say the data is out there. For the 
most part, the data is out there. It comes down to efficient 
use of technology and the efficient use of partnerships. And 
for North Carolina, we have been able to leverage up to $20 
million of partnership leveraging with other entities in 
sharing that set of data that they have a vested interest on. I 
mentioned that a little bit. The Department of Transportation 
needs information for their road centerlines. The LiDAR data 
does that for them. Utilities need it for power lines, for 
transmission and distribution.
    So we have not gone out and collected it ourselves. We have 
partnered and used technology to do that.
    Senator Vitter. Great. Thank you.
    Thank you, Mr. Chairman.
    Chairman Shelby. Senator Reed.
    Senator Reed. Well, thank you very much, Mr. Chairman, and 
thank you for holding the hearing. I was very active with my 
colleagues in trying to create this organization back a few 
years ago, and thank you for your work, gentlemen, and 
collectively your colleagues.
    We have set you with the task of updating flood maps, but 
that is a constant challenge, and it also requires resources. 
And I wonder, Mr. Edelman, can you comment? Because the annual 
report points out quite clearly how resources fell in 2011, and 
they are not keeping up with the challenge, particularly as we 
see some of these ocean effects and flooding effects getting 
more dramatic. Can you comment on that?
    Mr. Edelman. Yes, I can. It is really important for us to 
have a stable program, and this is one of the reasons behind 
trying to establish a 5-year plan. Perhaps if we could look at 
something more toward the way that the Transportation 
Improvement Program, the TIP, is done, it would allow for 
easier planning of activities so we do not have these whipsaws 
up and down and we can fully leverage everything.
    The second part of your question there really goes down to 
the heart that as a Nation we need to get out in front of this 
problem and stop building new problems. What we really need to 
do is draw that line in the sand such that let us not create 
more problems. Let us put our hands around what we have, have 
new development occur responsibly, and then let us come back, 
and then we can start working away at our existing problems.
    Senator Reed. Well, thank you.
    Now let me turn to Mr. Wright, and this, I think, is a good 
segue, because in Rhode Island we have a Coastal Resources 
Management Council. There is a lot of good work in terms of use 
of the seashore, and we have a lot of it. They are not formally 
engaged in making the maps and revising the maps, but they are 
a critical source of input for exactly the reason Mr. Edelman 
referred to.
    Can you describe how FEMA is conducting research with these 
agencies, working with these agencies to provide a context for 
the map making?
    Mr. Wright. Absolutely. So I am looking for partners, 
particularly at a State level, anytime I can find them. I know 
that my staff met with some of the folks from the Rhode Island 
Coastal Commission just here this past summer. As we look at 
these pieces--because to John's point, there are plenty of 
other State agencies that are doing pieces of this. But for me, 
this more fundamentally gets down to the understanding of risk.
    When we integrate these programs across a Federal, State, 
and local level, I think we do a more effective job to 
communicate the risk and bring the understanding that is 
necessary. It is not that you get seven different flavors of 
what is my flood risk from--the coastal commission has an 
answer, the local town council has an opinion, FEMA has an 
opinion. How do you bring those pieces together? That is what 
is going to best inform that homeowner.
    Senator Reed. Well, thank you very much. Again, I think 
your response illustrates another aspect of this, whereas there 
are generalized models of flooding that you have to use that 
have been validated, et cetera. Then there are the very 
localized conditions. And I wonder, and maybe Mr. Dorman can 
comment on this. Is there a tension here? Is it being 
effectively resolved between a generalized model versus some 
very specific conditions in a State or a locality?
    Mr. Dorman. Well, I think the generalized model should be 
utilized across the board. The question is: What inputs do you 
put into the model? If you put very specific localized inputs 
into the model, it gives you a much higher resolution of 
result, and that is why I believe the TMAC-- and what I would 
suggest is going to the structural level. You can define the 
100-year flood zone with that model. But if you use that same 
model and apply the elevation of the building, you can actually 
come up with when does the water intersect and enter the 
building's foundation, and that is where that localized, more 
specific data applies.
    Senator Reed. Any other comments, Mr. Wright or Mr. 
Edelman, on this point about localization versus the generic 
model?
    Mr. Edelman. Yes. Everything we need to do, we need to 
adapt to the local conditions. There are some studies that we 
work on that are more broad in general, and that is good to get 
an understanding of what are the overall future use losses or 
future expenses that the program may have. But when we are 
talking with the homeowners and the communities, everything we 
do has to be at the local individual level for it to be 
personal to them and to have defendability with the results.
    Senator Reed. Well, thank you very much, Mr. Wright, Mr. 
Dorman, and Mr. Edelman. Thank you.
    Chairman Shelby. Senator Menendez, finally. Thank you.
    Senator Menendez. Thank you, Mr. Chairman. I want to thank 
the panel. This is an incredibly important topic, but I want to 
focus my comments elsewhere.
    Mr. Wright, as you know, the handling of Sandy flood 
insurance claims by FEMA and its contractors was an utter 
disaster, resulting in untold thousands of survivors being 
lowballed and unable to rebuild.
    Now, I exposed this pattern of underpayment in hearings and 
press conferences more than 2 years ago and subsequently worked 
with your predecessor and with you to establish a virtually 
unprecedented opportunity for all policyholders to have their 
claims reviewed once again. And while FEMA should have gotten 
it right the first time, I do appreciate FEMA's acknowledging 
it made critical mistakes and attempting to remedy them.
    Unfortunately, even the remedy has been fraught with 
hurdles and delays, with many Sandy victims still waiting 200, 
300, or 400 days beyond the 90-day timeframe FEMA initially 
promised. But I want to focus on the present rather than the 
past and get New Jerseyans the funds they need to rebuild as 
quickly as possible.
    On this front, I worked with you to speed the recovery by 
establishing a pilot program to get Sandy survivors the funds 
FEMA itself agreed it underpaid originally without jeopardizing 
the homeowner's right to appeal to a third-party neutral. If it 
taking so long to conclude the neutral hearings, why not pay 
the undisputed amount up front and let people get going?
    So let me take a moment to give the Committee a real-world 
example of how this policy change made a tangible difference in 
people's lives.
    Ms. Donna Amon, a woman from Bayville, New Jersey, took 
advantage of the pilot program and received her relatively 
modest interim payment without having to waive her right to an 
appeal. She had recently suffered an unimaginable tragedy when 
her husband was killed in an accident while at work. After 
working with her for several months, she wrote the following, 
after receiving her interim payment:
    ``I cannot thank you all enough. I finally received about 
$6,500 long-owed under my flood policy, and it could not have 
come at a better time as I was in a very tight financial bind 
after losing my husband as he was working on a boat that went 
down near the Tappan Zee Bridge and went in to save the other 
two crew members. First the Sandy storm, and then losing my 
husband. You feel so alone, and I really felt no one cared. My 
home was demolished in February, and 2 weeks after, I lost my 
husband, then the finances. Getting the money up front was so 
important for basic things. I am still pursuing the neutral 
because I feel I was underpaid even after the review found I 
should be owed $6,500. But I could not just wait 5 or 6 months 
for the neutral to conclude. This helps the little people so 
much. Please keep it going. Do not stop now. Other families 
need the same help that I have received. Sincerely, Donna.''
    Now, previously, Sandy survivors were faced with an almost 
impossible choice: either accept the offer from FEMA and waive 
your right to an appeal, or wait potentially for months on end 
without any payments until the neutral issues a determination 
and FEMA accepts it. Many survivors who know the FEMA offer was 
still less than they deserve were all but forced to accept the 
underpayment because they needed the funds immediately to keep 
their heads above water.
    Now, unfortunately, I understand that FEMA now claims it 
does not have the authority to implement even these basic 
common-sense fixes. And I do not want to go into the debate 
over the Administrative Procedures Act or FEMA's regulatory 
authority. You know, I can go through a list of things FEMA 
refused to do at first but later their lawyer said, yes, you 
know, allow Sandy survivors to appeal their claim outside of 
the normal appeal process, outside of the court system, allow 
Sandy survivors who survived their proof of loss to nonetheless 
have their claim reviewed again, to have an independent third-
party neutral outside of FEMA established and able to overturn 
a decision of FEMA. FEMA first said none of these things could 
happen, and then subsequently they did.
    So I ask you, Mr. Wright, do you believe that Sandy 
survivors or, for that fact, anyone who faces this in our 
country should have to choose between exercising their right to 
appeal from a third-party neutral or receiving the undisputed 
amount FEMA acknowledges it owes them in a timely fashion? And 
do you believe it is fair to say that Sandy survivors who have 
waited nearly 4 years to get what they were entitled to have 
suffered an emotional and financial hardship?
    Mr. Wright. Mr. Menendez, I appreciate your leadership on 
this, and I, like you, am entirely focused on getting everyone 
the dollars that they are entitled to. And I think that I have 
demonstrated to you and your team over the last 15 months, I 
get to ``yes'' as much as anything. I have moved a lot of 
barriers out of the way, and the struggle I have had on this 
one, without going into particulars, the Administrative 
Procedures Act, is now I am stumbling through these pieces. So 
I have gone back to my team and said the outcome is speed to 
get these answers, and so I have to find more ways to speed 
this up, to get folks through the neutral, so we are at a point 
where 97 percent of the files are reviewed and 80 percent of 
the offers are made, which has not been fast enough for me or 
for you. And so I have got to stay legal in these various 
parameters I have under the laws and regulations. I will do 
that and continue to push to get these payments done, because 
they are entitled to closure and they are entitled to the 
payments.
    Senator Menendez. Well, I want to--my time has expired. If 
the Chairman would indulge for another minute, here are the two 
questions I asked you: Do you believe that Sandy survivors or, 
for that fact, anyone else, should have to choose between 
exercising their right to appeal from a third-party neutral or 
receiving the undisputed amount FEMA acknowledges that it owes 
them in a timely fashion? That is not whether it is the law or 
not. Do you believe that as a proposition?
    Mr. Wright. So I have to run a consistent process. I have 
got more than 10,000 that have already been closed, and so as I 
have worked this with the legal side, I have got to find a way 
to hold that together so that I treat everyone----
    Senator Menendez. OK. So I cannot get a simple straight 
answer on a simple proposition. I am not talking about the 
legalistics of it. I am talking about the value here. Is it 
fair that someone has to ultimately give their right up for a 
third-party neutral in order to be able to accept the payment 
that is undisputed in the first place? Is that a fairness 
question?
    Mr. Wright. What I want to be able to do is give them the 
option for their dollars and give them the option for getting 
that neutral review if they choose to do that. We did agree to 
add that piece, and we are speeding up the pace of it. It has 
not gong fast enough.
    I will continue to work to find a way to get payments in 
people's hands.
    Senator Menendez. Well, Mr. Chairman--and I know you have a 
great concern about this program and certainly its financial 
viability. But here is my point: If you for years--years--pay 
your flood insurance policy, meet your obligations, and then, 
God forbid, when the moment comes, the disaster comes, and you 
find yourself being arbitrarily and capriciously lowballed, 
contractors arranging to have lowballed amounts, and then you 
are forced by virtue of a process that makes you accept what 
you know is a lowball because you cannot wait to get your life 
together again, something is wrong with that.
    Chairman Shelby. I agree.
    Senator Menendez. So as we think about fiduciary 
responsibilities, which I share with the Chairman, I also think 
we have to think about these types of program changes.
    Thank you, Mr. Chairman.
    Chairman Shelby. Senator Warren.
    Senator Warren. Thank you, Mr. Chairman, and thank you for 
holding this hearing. Many of us worked together to draft the 
bipartisan Homeowner Flood Insurance Affordability Act, which 
gave homeowners some relief on the dramatic increases for flood 
insurance. And I was glad to be part of that process, but I am 
still very concerned about the ongoing mapping.
    Over 3 years ago, FEMA released many flood maps that our 
cities and towns knew were not accurate, and those mistakes 
have caused real problems for Massachusetts communities. The 
city of Quincy, for example, was forced to appeal its flood 
maps, and the city was successful, and it lowered or eliminated 
the flood risk designation for nearly 2,000 properties. But 
that appeal cost the city about $650,000. That is money that 
Quincy could have used to hire more teachers or more 
firefighters or upgrade roads or programs for seniors. But they 
had to spend it on correcting FEMA's mistake.
    And it is not just Quincy. Hull and Marshfield and Sitchuet 
and Duxbury and communities all around Massachusetts have had 
similar problems with flood maps. I understand it is a 
difficult process and that FEMA needs more resources, but this 
just is not working.
    So, Mr. Wright, FEMA has acknowledged that there have been 
costly errors because of inaccurate maps, and some communities, 
like Quincy, can stretch their budgets and pay to have those 
errors corrected. But I want to know what happens to a 
community that cannot afford to hire costly engineering 
consultants to review their maps. What happens to them?
    Mr. Wright. So we work through a process that ultimately is 
to engage the community at a series of intervals, because I 
want to make sure that, to the degree that the community has 
information or things that FEMA's map developers need to know, 
we get that information. What I do see--and we will talk 
generally as opposed to a specific community in Massachusetts--
is that there are times by which we have lower level people in 
a community that are attending those meetings that do not 
necessarily have the viewpoint that is broad. Key pieces in the 
Massachusetts elements dealt, yes, with some data elements, but 
also with alternative models that could be used to deal with 
waive transformation.
    Senator Warren. I am sorry, but the problem is the maps are 
wrong, and they were able to prove that ultimately. It is just 
that it cost them $650,000 for one town to prove that the maps 
were wrong. And that helped ultimately nearly--that changed the 
designation for nearly 2,000 properties. I am just asking the 
question. If a town believes the maps are wrong and it does not 
have the money to hire the very expensive engineering 
consultants the way Quincy did, what happens to those towns?
    Mr. Wright. What happens to those towns is we have to work 
with them through that process so that I do get them that 
piece. I understand the disconnect on this, ma'am. I truly do--
--
    Senator Warren. You are telling me that you would fix it 
and that Quincy did not need to spend $650,000 for the 
independent engineering reviews?
    Mr. Wright. So as we go through the mapping process, if 
they get us the information and those inputs along the way, we 
will change our products. In this instance--and there were some 
of the appeals that were successful for communities, others 
that were not successful along the Massachusetts----
    Senator Warren. All right. Look, we are just going to--I am 
going to keep saying the same thing. Challenging your maps is 
expensive.
    Mr. Wright. I understand.
    Senator Warren. And when it turns out that you were wrong, 
I want to know what happens to the people who cannot afford to 
challenge, how they get reimbursement. Look, I pushed hard for 
communities to be reimbursed when they successfully appealed 
flood maps that turned out to be wrong. But, unfortunately, 
that provision was not included in the final bill.
    Let me ask a different question. Will FEMA support such a 
provision in the upcoming reauthorization bill?
    Mr. Wright. So, Senator, I will commit to work with you and 
your office so that we can look at those specific elements as 
it goes forward.
    Senator Warren. All right. Look, I will just leave it there 
then. The accuracy of flood maps should not be based on whether 
a community can scrape together the money for a very expensive 
independent review. Our cities and towns deserve a process that 
is fair.
    I want to ask about one other thing quickly, and that is, I 
am concerned that we are not doing enough to utilize local 
expertise. Cooperating technical partners, the CTPs, are 
composed of State agencies, regional agencies, participating 
communities that have the capability of becoming more active 
participants in the FEMA flood mapping program. And the 
Council's report indicates that FEMA is not bringing in 
communities and local partners up front.
    So, Mr. Dorman, let me just ask you, what steps should FEMA 
take to collaborate with the cooperating technical partners and 
ensure that local communities are brought into this process 
earlier?
    Mr. Dorman. Well, Senator Warren, I will say for the State 
of North Carolina that partnership with FEMA has been very 
positive. After Hurricane Floyd, we created a cooperating 
technical partner relationship with FEMA. We created a 
cooperating technical committee in the State of North Carolina 
that brought all stakeholders to the table. And as we moved 
across the State, we updated the maps and leveraged from all 
agencies and local governments their information and data.
    Senator Warren. So I am glad to hear that it worked, as you 
put it, together. What I am really asking, though, is the 
question about additional steps that need to be taken where it 
is not--and I am out of time here, so I will just say the other 
place I would go is I understand that you are very stressed for 
resources to be able to do this and that this is a very 
expensive process.
    I will be submitting more questions for the record here, 
and particularly questions on behalf of the towns of Marshfield 
and Sitchuet and Duxbury. It is clear that we still have a lot 
of work to do to verify the accuracy of the flood maps and not 
force towns and homeowners to have to pay to correct maps when 
they are erroneous, and that we also need to expand the role of 
our communities in beginning the flood mapping process right 
from the beginning.
    Thank you, Mr. Chairman.
    Mr. Dorman. Thank you.
    Chairman Shelby. Mr. Wright, with all the new tools in 
mapping that we have, we map the world, so to speak.
    Mr. Wright. Right.
    Chairman Shelby. Why can't we in the U.S. map the flood 
zones? It is all based on identifying a risk, assessing the 
risk, as you talked about, and so forth, maybe mitigating it. 
But what is the problem? We have been working on this for 
years. I have been on this Committee 30 years.
    Mr. Wright. Yes, you have.
    Chairman Shelby. And the Flood Insurance Program, we take a 
step forward and then a step backward. A lot of good questions 
have been asked here today. When somebody is not in a 
floodplain, never been there, and they have to pay for risk. 
Others do not. I understand all that. And there is mitigation 
involved. I know FEMA has tried to get people out of harm's 
way.
    Mr. Wright. We have.
    Chairman Shelby. But with the tools we have today of 
mapping, it seems that this could be done. Is it easy? No, it 
is not easy. But it could be done.
    Mr. Wright. It can be, sir, and one of the key linchpins 
for me on this, we mentioned the LiDAR, the elevation and 
structural pieces that are there, that technology has continued 
to evolve. The price points, while still very expensive--the 
three-dimensional elevation program, which is the interagency 
group across the civilian side of agencies that use elevation 
data and contribute so we do not duplicate anything, estimates 
that it would cost about $600 million to finish getting those 
data across the Nation.
    Chairman Shelby. Let me stop you a minute. But you have 
paid out billions of dollars over time, billions and billions 
of dollars.
    Mr. Wright. We have, and so, sir, what we have done is we 
are the largest contributor to that on an annual basis. This 
year alone, we are putting $20 million into it. Today----
    Chairman Shelby. But that is nothing compared to what you 
need, $20 million.
    Mr. Wright. I agree, and I think one of the game changers 
on this is we must have an elevation data layer across the 
Nation that is accurate and credible, and with that, we will 
start dealing with risk in some different ways related to the 
folks who are in versus out and some of the automated models. I 
tell you, in the riverine area, we see as many structures move 
in as move out each year. The people who move out do not sent 
thank-you notes. The people who move in call their friends, and 
they complain about, ``How dare you move me in?''
    We look at the issue in Louisiana. Those maps were updated 
in 2012 and 2014. The 100-year was marked, as well as the 500-
year. It is very interesting to actually look that most of East 
Baton Rouge that was affected, outside the special flood hazard 
area, was mapped as part of the----
    Chairman Shelby. How long has it been since Baton Rouge 
flooded like that?
    Mr. Wright. I would always want to defer to locals on this, 
but my understanding is 1983 was the last time they had 
something of this magnitude. But the built environment was very 
different in 1983. This is a point that, as we look at it, yes, 
we have got to do the mapping, but Mr. Edelman referenced the 
report we did in terms of the next, you know, 80-some-odd years 
of our program. When they looked at it, climate variability has 
an element related to it. But more than 30 percent of the 
growth in our floodplain is because of new construction, new 
construction that today is probably directly adjacent, but 
because they put concrete and asphalt down, the water is no 
longer absorbing, and it just conveys, and it is causing more 
floods.
    Chairman Shelby. Well, what is the answer? I mean, you 
know, this Committee here has been involved in this, and it 
seems like we are just treading water. You know, we are not 
going anywhere. We play with the program, but we have not had a 
comprehensive approach that will work, because what you are 
doing, you want a program that is accurate, right?
    Mr. Wright. Right.
    Chairman Shelby. You cannot say that this program is 
accurate, can you? Maybe in some areas.
    Mr. Wright. So I will tell you that we credibly can lay out 
the pieces of that, but there are levels of precision that are 
there. So you referenced our 56 percent that meet our standards 
today. That is resource-dependent. The standards are clear, and 
those are credible. But, Mr. Chairman, I would assert to you 
that the very point of this hearing today gets to the crux of 
it. Of all the dimensions of the program, I do think that the 
mapping element has a foundation of credibility and a clear way 
that with the resources would allow us to absolutely show the 
risk, and with that it must then become the launch point, and 
as I described, I must transform how we actually show risk in 
premiums then. I must look toward the future risk in this 
country related to land use. And then we get to this fourth 
dimension that is there, that, yes, it is about affordability 
or grants and the like, but there are difficult questions for 
those who cannot afford it.
    While I am absolutely confident there is no silver bullet 
on that, I look forward to bringing to this Committee next year 
some framing as it relates to the data so that we can inform--
--
    Chairman Shelby. They may not be able to afford the 
premium. We understand some people just do not have the means. 
But, on the other hand, can they afford to continue to live 
there? That is a risk, too.
    Mr. Wright. So one of the things that was required in the 
2014--there were elements of it in the 2012 bill, but it is 
very clear in the 2014 bill, it requires us to do the clear 
communication of risk. And so part of this evolution in my 
underwriting practices, we are re-underwriting a whole set of 
policies because my understanding of the direction in the 
statute is I must tell folks what their true risk is. I intend 
to do that with a pricing signal so that they understand the 
gap between what they are paying and what their full premium 
would be.
    Chairman Shelby. As people continue to build in a known 
flood area, prone to flooding, they have got to put a price, 
when they start doing that, on the likelihood that there is 
going to be a flood there.
    Mr. Wright. And so I think part of what we are----
    Chairman Shelby. How do you do that? Do you have to work 
with the zoning people?
    Mr. Wright. We do have to work with the zoning people on 
that. What I find--and this may be too broad of a 
generalization, but to the degree that someone is constructing 
something today, 2016, in the high-hazard area, they are 
building higher and stronger. They are required to do so. I 
have got two places of concern: the area just outside the 
special flood hazard area who maybe the flooding extends in 
their direction, but far more problematic for me in an urban 
context particularly is the water that used to absorb into the 
water table upstream now is flowing down. The second piece of 
that then is there is so much of the Nation's housing stock 
that was built in the 1950s, 1960s, and 1970s. The homes that I 
was at in Louisiana were all constructed before 1980.
    Chairman Shelby. And a lot of them were built on slabs, 
were they not?
    Mr. Wright. Slab on grade.
    Chairman Shelby. And if they flood, they do not have to 
flood much to flood the house.
    Mr. Wright. Exactly. And I grew up in a slab-on-grade, 
1,100-square-foot home. That is what so many Americans--that is 
what their experience is.
    Chairman Shelby. It is cheaper to build.
    Mr. Wright. It is much cheaper to build, and when someone 
is trying to do this--trying to have their own home, and so I 
look at the questions of understanding risk, how that evolves, 
as well as how to make it affordable, and part of where I am 
getting, Chairman Shelby, is: So how do we hold that against 
affordable housing in this country in a way--and do it 
explicitly? Because I think, unfortunately, in this program 
over the last few decades, we have allowed folks to have 
discounts and not know they had--and still complain about their 
price because they think it was too high, and then not take 
enough action to help people get out of harm's way. It has to 
be in a way by which there is still a place for normal 
Americans like my parents to live.
    Chairman Shelby. Senator Brown, do you have any questions?
    Senator Brown. Thank you. I thought that was a very good 
conversation back and forth. Thank you, Mr. Chairman. I think 
your initial question was: Can't the science figure this out? 
And I think the science, after listening to that discussion, 
clearly the science is simpler than the politics of people on 
the Ohio River or wherever in my State thinking their insurance 
is too high or that they should not have to buy it or why is 
the Federal Government forcing me to do this at this price and 
the difficulty of selling their house, who wants to buy that 
house then, even though homes along the Ohio River are pretty 
inexpensive. It is an area of the State, sparsely--depending on 
where, of course--populated, and so low home prices and higher 
insurance rates do not go together necessarily well. I think 
that is the complexity of this.
    Mr. Wright. And I would add one additional point to that. 
To the degree that the prices may be a bit less, they are often 
bought by a landlord who has the means to do so, and so we have 
renters. So I look across the 5.1 million policies; only 1 
percent of them, 50,000 of them, are contents only, essentially 
a renter's policy. And so so many of those people that I 
interacted with in East Baton Rouge may or may not have fully 
understood their risk. They did not personally have a mandate. 
They were not the homeowner. Yet they lost tens of thousands of 
dollars worth of their life, and they have far less means 
available to them to go put that back together again. That 
policy is actually pretty reasonably priced.
    Chairman Shelby. How do you communicate that?
    Mr. Wright. Well, that goes to the point that Mr. Dorman 
highlighted, that we have got to get ourselves--one of the 
tools that we helped invest in, they have prototyped and proven 
the concept, is you got to show them pictures. You have got to 
show them three dimensions: here is my house, here is where the 
water is going to go, and here is the price tag of what 
happens.
    Senator Brown. Give us a range of what the price--I mean 
understanding you cannot be precise, but what the annual 
insurance would be in a modest rental to ensure the contents.
    Mr. Wright. Somewhere between--it depends on how some of 
the surcharges play out. That set aside for a moment, somewhere 
between $160 to $300. But $160 would be something that is a 
very reasonable amount of coverage. Now, depending on your 
means, that $160 could be still a substantial investment that 
would be a difficult choice for someone to make.
    Chairman Shelby. Is this a month or year?
    Mr. Wright. Per year, sir.
    Senator Brown. Per year.
    Chairman Shelby. That is pretty cheap.
    Mr. Wright. Right? And so I start----
    Senator Brown. For us.
    Mr. Wright. So I started looking at how then do we look at 
getting--honestly, if I had to hypothesize a bit about 
affordability, I think we are going to get a lot of some of 
these conversations, the people who really need the coverage 
that do not have, that may only need a few hundred dollars----
    Senator Brown. You said at least in your visit to Baton 
Rouge that it was 1 percent of renters that had that insurance? 
Or what did you say exactly?
    Mr. Wright. So nationwide, only 1 percent of my policies 
are a contents-only policy for a renter. And I am sure that----
    Senator Brown. Renters in floodplains or close to 
floodplains.
    Mr. Wright. Yeah.
    Senator Brown. And that is flood insurance, 1 percent, or 
content insurance generally? It is flood insurance?
    Mr. Wright. So it is flood insurance to cover contents. If 
you are a renter, you would not cover the structure, obviously.
    Senator Brown. No, but not other kinds of rental 
insurance----
    Mr. Wright. Correct.
    Senator Brown. ----to cover possessions. It is only--the 
flood insurance part of that is 1 percent.
    Mr. Wright. And, generally speaking, across the other 
perils, flood is excluded. You can only come to National Flood 
practically to get that coverage.
    Thank you to both the Chairman and you.
    I look forward to collaborating with the Committee as we 
move forward.
    Chairman Shelby. Thank you. The Committee is adjourned.
    [Whereupon, at 11:55 a.m., the hearing was adjourned.]
    [Prepared statements, responses to written questions, and 
additional material supplied for the record follow:]
                  PREPARED STATEMENT OF ROY E. WRIGHT
 Deputy Associate Administrator for Insurance and Mitigation, Federal 
                      Emergency Management Agency
                           September 13, 2016
Introduction
    Good morning Chairman Shelby, Ranking Member Brown, and Members of 
the Committee. My name is Roy Wright, and I am the Deputy Associate 
Administrator for Insurance and Mitigation, responsible for directing 
FEMA's risk management, mitigation, and flood insurance programs. Thank 
you for the opportunity to testify about FEMA's Technical Mapping 
Advisory Council (TMAC).
    Today, I will provide an overview of the TMAC and the reports and 
recommendations it has provided to FEMA since it was established in 
late 2014. I will also speak about FEMA's strategy for implementing the 
recommendations, which vary in complexity and level of effort required 
to address them, and well as the progress we have made to date. The 
Council's recommendations will aid FEMA in furthering our efforts to 
provide communities with the best available data and tools to make 
better informed decisions that reduce the risk and consequences of 
flooding nationwide.
TMAC Background
    Under the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-
12), Congress established the TMAC and authorized specific statutory 
duties. The TMAC is tasked to provide recommendations on how to 
improve, in a cost-effective manner, FEMA's flood mapping program to 
ensure that Flood Insurance Rate Maps (FIRMs) reflect the best 
available science and utilize the best available methodologies for 
considering the impact of future development on flood risk. Consisting 
of Government and private sector experts from across the country and a 
diverse group of flood map stakeholders, in September 2014, the TMAC 
convened for its first public meeting. During its first year, the TMAC 
developed recommendations that it provided to FEMA through two reports 
in January 2016: a 2015 Annual Report and a Future Conditions Risk 
Assessment and Modeling Report. The TMAC annual report describe the 
Council's activities, evaluate FIRM activities, and summarize the 
Council's recommendations.
    The Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) 
requires FEMA to implement a flood mapping program, after a review by 
the TMAC. When the program is applied, it will result in technically 
credible flood hazard data in all areas where flood maps are prepared 
or updated. In July 2016, the TMAC submitted the TMAC 2016 Flood 
Mapping Program Review as required. This report included 14 
recommendations to assist the agency to provide technically credible 
flood hazard data into the future. Based on this advice and my 
recommendation, the Administrator has certified the flood mapping 
program as credible.
    Composition of the TMAC is defined in BW-12 and includes four 
designated members and 16 appointed members. The four designated 
members of the Council serve as regular Government employees (or the 
designees thereof) and consist of the FEMA Administrator, the Secretary 
of the Interior, the Secretary of Agriculture, and the Under Secretary 
of Commerce for Oceans and Atmosphere. The additional 16 members are 
appointed based on their demonstrated knowledge regarding surveying, 
cartography, remote sensing, geographic information systems, or the 
technical aspects of preparing and using FIRMs. To the extent possible, 
membership of the TMAC is balanced between Federal, State, local, 
tribal, and private sector members. There is also geographic diversity 
including representation from areas with coastline on the Gulf of 
Mexico, and from other areas identified by the FEMA Administrator as 
having a high risk for flooding.
    I would like to thank the members of the TMAC for their hard work 
and dedication over the past 2 years. The Council formulated 
recommendations to improve the quality of flood mapping and to ensure 
that the best available science and methodologies are used when 
considering the impacts of sea level rise and future development on 
flood risk. I appreciate the tremendous amount of professional 
expertise and personal commitment that each member invested to convene 
as a council, conduct subcommittee discussions, and research and 
produce the Council's reports and recommendations. The Council's 
recommendations will aid FEMA in furthering our efforts to provide 
communities with the best available data and tools to make better 
informed decisions that reduce the risks and consequences of flooding 
nationwide.
    As indicated by their name and clearly stated in the TMAC charter, 
the Council is an advisory board established to advise and make 
recommendations to the FEMA Administrator and the flood mapping 
program. Informed by the TMAC's reports and recommendations, FEMA will 
determine the appropriate path forward as we evolve based on changes in 
customer needs, advances in technology, and the National Flood 
Insurance Program (NFIP) reform requirements.
TMAC's Reports and Recommendations
    The TMAC's 2015 Annual Report contains 22 recommendations for 
FEMA's flood mapping program. The recommendations generally fall into 
three key themes: credible flood data, digital inventory and delivery, 
and customer-oriented products (including structure-level risk, and 
more options for targeted products and engagement). FEMA fundamentally 
agrees with all 22 of the recommendations in the 2015 Annual Report. 
Over the last several months, the Agency has been working to evaluate 
each recommendation to understand resource requirements and impacts to 
inform implementation priorities, sequencing, and investments.
    Perhaps the most transformative recommendation made by the TMAC in 
2015 is to transition from one percent (1 percent) annual chance as the 
basis for flood insurance ratings to a structure-specific flood 
frequency determination. This recommendation will require an entirely 
new approach to insurance rating and underwriting, including new 
regulatory hazard and risk products and potential impacts on floodplain 
management standards.
    In January 2016, the TMAC delivered its Future Conditions Risk 
Assessment and Modeling Report. This statutorily mandated report 
includes seven overarching recommendations and numerous sub-
recommendations. The first recommendation calls for providing future 
conditions flood risk products, tools, and information for coastal, 
Great Lakes, and riverine areas. It is the most substantial of the 
recommendations and the remaining recommendations are largely related 
to the details of how this could be achieved, with sub-recommendations 
providing even more details. By recommending that FEMA add future 
conditions assessments, modeling and mapping, TMAC is recommending that 
FEMA drive forward both the state of the science and the state of 
application of the science on a broad scale. Transitioning from an 
applied science agency, to an agency that also performs scientific 
research, is significant.
    In July 2016, the TMAC submitted the TMAC 2016 Flood Mapping 
Program Review to FEMA. This report includes 14 recommendations to 
assist the agency to provide technically credible flood hazard data 
into the future. The report focuses on the findings of the TMAC's 
review of the flood mapping program, as required by HFIAA. The TMAC 
reviewed the mapping program's structure, process, outputs, quality 
management, and metrics and concluded that FEMA's mapping program, when 
applied as designed, results in technically credible flood hazard data 
in areas where flood insurance rate maps are prepared or updated.
    The TMAC is currently working on its 2016 Annual Report. We 
anticipate that the TMAC will submit this report to FEMA in early 2017, 
and that it will include additional recommendations, as well as further 
guidance and insight into its previous report recommendations.
FEMA's Implementation Strategy
    Addressing the TMAC recommendations has been and will continue to 
be one of the top priorities for the National Flood Mapping Program. 
Today, I want to summarize for you our strategy for implementation, and 
talk about some of the priorities and investments the Agency focused on 
this year. Our implementation strategy can generally be summarized as 
follows:

  1.  Address several technical recommendations through FEMA's 
        consistent, routine approach to maintain and enhance national 
        mapping policies.

  2.  Engage internal and external stakeholders and partners as FEMA 
        determines the appropriate sequence of program changes that 
        will support the implementation of the transformative mapping 
        reforms recommended by the TMAC.

  3.  Continue to make strategic investments (e.g., high resolution 
        topography, structure-specific datasets, enhanced flood models) 
        while engaging in strategic, long-term planning to lay the 
        foundation for transformative new mapping polices, products and 
        regulations.

    The reports submitted by the TMAC include some technical 
recommendations that address our ongoing program delivery, seeking 
refinements or improvements to what we already do and how we operate. 
Just as we did with the BW-12 legislative mandates for the mapping 
program, we are using existing program mechanisms to implement those 
changes to the extent possible. Through our regular Guidelines and 
Standards cycle, several of the TMAC's 2015 recommendations will be 
implemented in November 2016, and an additional set of TMAC 
recommendations are scheduled for implementation in November 2017.
    Over the last few years, the Agency has continued to enhance the 
Cooperating Technical Partners (CTP) program within the flood mapping 
program. We are using established CTP coordination mechanisms to 
address the TMAC's CTP-related recommendations. In many ways, the work 
we've been doing to enhance the CTP program is already addressing much 
of what is in the recommendations. Similarly, we are using our Flood 
Risk Products Integrated Project Team (IPT) to start addressing the 
recommendations from the 2015 Annual Report about understanding user 
needs for our flood risk products.
    Other recommendations are transformative and can't simply be 
assigned to an existing team or process to address. Those include the 
TMAC's recommendations for transitioning away from mapping the one 
percent (1 percent) annual chance flood hazard, providing structure-
specific risk information, digital delivery of our products, and most 
of the future conditions recommendations. These recommendations 
necessitate extensive research, planning, and strategizing, both 
internally and with our partners.
    These engagements are ongoing, but in the meantime we know what 
some of the foundational elements are to enable delivery on these 
recommendations in the future. In FY17, one of our focus areas in Risk 
Management is to deliver flood risk data that is useful for risk-based 
decisions. This year we will continue to make targeted investments, in 
coordination with the United States Geological Society (USGS) and the 
3DEP program, that continue to move the Nation toward a national high-
resolution topographic dataset. We will continue to invest in enhanced 
modeling and multi-frequency returns. Being able to evaluate the 
frequency of flooding at a structural level using high resolution 
topographic data is an essential step toward structure-specific risk 
rating and delivery of a redesigned risk rating for the NFIP. We are 
also making strategic technological investments and changes, not just 
to improve digital delivery of the mapping products, but to ensure that 
enhancements of FEMA mapping products are interoperable with insurance 
rating mechanisms, mitigation planning initiatives, and floodplain 
management.
    FEMA is also exploring a more comprehensive approach to addressing 
future conditions mapping and the future conditions recommendations 
provided by the TMAC. The TMAC's Future Conditions Recommendation 6, 
which directs the completion of pilot studies, provides a way to plan 
for and develop an initiative that can accomplish the objectives set 
forth in the future conditions recommendations and can be performed in 
a way that addresses the majority of the other recommendations and sub-
recommendations found in the Future Conditions report.
    Addressing the research, development, program planning, and 
implementation questions through a series of demonstration projects 
will lead to an efficient and effective strategy to provide future 
conditions flood risk products, tools, and information. The TMAC was 
clear in its future conditions recommendations to FEMA that future 
conditions should be reflected in non-regulatory products at this time, 
and not on the regulatory Flood Insurance Rate Maps (FIRM).
    FEMA has already been conducting sea level rise pilot studies. We 
are working to identify the specific remaining research gaps to be able 
to design additional future conditions demonstration and pilot projects 
to address those gaps and inform how FEMA establishes and resources 
future conditions mapping initiatives.
    FEMA has emerging efforts that complement and are informed by the 
TMAC's recommendations, such as an ongoing initiative to redesign risk 
rating for the NFIP. FEMA considers a new approach to insurance rating 
and underwriting crucial for the program, and has already started 
identifying the technical considerations for implementation. FEMA 
leadership has incorporated progress on this recommendation into 
performance plans. FEMA is currently assessing this recommendation in 
conjunction with the ongoing initiative to analyze technologies, data 
sources, and trends for flood risk quantification toward a long-term 
goal of developing a redesigned risk rating system for the program. 
These initiatives and investments will be critical as FEMA assesses how 
to move from being able to support the assessment of structure-specific 
flood frequencies, to eventually delivering actuarial structure-
specific flood insurance ratings in the future.
    To support a mindful, meaningful transformation, in FY17 we will 
begin implementation of the 2015 Annual Report's Recommendation 2 which 
calls for a national 5-year operations plan. Our national plan will be 
informed by Regional 5-year plans to support appropriate flexibility 
and variance at the regional level while providing consistency at the 
national level. This 5-year plan will become a rolling plan that will 
help us bridge operations from our current status to where we want to 
go as we transform. The development of a 5-year operations plan will be 
supported by the implementation of Annual Report's Recommendation 3, 
which calls for the development of program goals and metrics that will 
help drive investments and behaviors needed to transform the delivery 
of our flood mapping program.
    The timing is right for the transformation of the National Flood 
Mapping Program, however we need to account for and learn from the 
investments we've already made--especially in the program's evolution 
to Risk Mapping, Assessment, and Planning (Risk MAP). The status of the 
mapping inventory currently varies from Region to Region. FEMA's 
Regional offices flood mapping investments each reflect unique 
circumstances, and accordingly, the Regions have varying degrees of 
readiness for implementing TMAC recommendations. We also have a 
significant number of projects already in process that utilize current 
policies and standards, so we need to take those projects into account 
as we plan our implementation of and investments in the 
transformational changes.
Conclusion
    We value the work of the TMAC, and will continue to work with the 
TMAC and Congress to continually evolve the flood mapping program to 
meet the needs of individuals and communities to understand their flood 
risk and provide the foundation for actuarial rate setting in the NFIP.
    Again, thank you for the opportunity to testify today. I look 
forward to any questions the Committee may have.
                                 ______
                                 
                   PREPARED STATEMENT OF JOHN DORMAN
    Chair, Technical Mapping Advisory Council, and Assistant State 
Emergency Management Director for Risk Management, and Director, North 
                 Carolina Flood Risk Management Program
                           September 13, 2016
    Chairman Shelby, Ranking Member Brown, and Members of the Committee 
on Banking, Housing, and Urban Affairs; good morning and thank you for 
the opportunity to appear before you and provide my perspective on the 
2015 Technical Mapping Advisory Council (TMAC) recommendations. I am 
John Dorman, North Carolina Assistant State Emergency Management 
Director for Risk Management, and Director of the North Carolina Flood 
Risk Management Program. I am currently serving as the Chair on the 
Technical Mapping Advisory Council.
    The English proverb ``Necessity is the mother of all innovation'' 
speaks well to the overall tenet of TMAC recommendations. FEMA has 
diligently overseen the generation of current flood hazard focused data 
and products. However, transformative strategies must be implemented to 
address needs of the program: insurance rates that reflect structure-
anticipated flood loss; communication focused on financial loss as 
opposed to an ``in or out'' focus; and, homeowner's understanding of 
and confidence in the data used for flood hazard determination and 
insurance premiums.
    For North Carolina, Hurricanes Floyd, Francis, Ivan, and Irene all 
demonstrated and compelled the need to implement these transformative 
strategies. Thus, North Carolina has successfully implemented the 
ability to generate structure-based flood probability; structure-based 
risk assessments; real-time structure-based flood impact and alert; 
and, structure-specific risk-based insurance rating. Recent events 
across the Country have again shown a lack of accuracy and awareness of 
structure-specific flood risks that both large storms and more 
localized flash flooding can present. With these needs ever apparent, I 
believe TMAC has constructed recommendations that, if implemented, will 
transform the program and improve our Nation's resiliency to flooding. 
Below are four recommendations of the TMAC that I believe are key to 
transformative improvements:
    First, fundamental to accurate flood hazard identification and risk 
assessment, is accurate, high-resolution ground elevation data. Recent 
developments in data collection technologies offer the more accurate 
and efficient collection of ground elevation data. Technology like the 
Geiger LiDAR sensors collect data at both a higher altitude and higher 
accuracy allowing for faster acquisition time and reduced costs of 
acquiring and processing LiDAR data. This higher resolution data also 
allows the opportunity to meet the needs of other stakeholders so that 
cost sharing objectives can be achieved.
    Second, the transition from a 100-year floodplain delineation and 
flood elevation to a structure-specific annual chance flood frequency 
is critical to raise awareness that every property has some level of 
flood risk--26 percent of flood damages are on properties outside the 
100-year floodplain delineation. The recent events in Louisiana 
demonstrate the importance of altering our Nation's mentality that one 
is safe if they live outside of the line depicted on a map and raise 
awareness of flood probability at the structure level.
    Third, the transitioning focus to structure-based risk assessment. 
This increased level of detail that calculates structure-specific per 
cent annual chance of flooding and estimated annualized damage 
calculations can inform mitigation decisions and create more accurate 
risk-based insurance premiums. This will directly result in mitigation 
actions to reduce losses, lessen the financial burden on the Federal 
Government to help communities recover from disasters and create a more 
fiscally sound FIMA.
    Finally, we must transition to a dynamic, queried display of data, 
models, maps, and risk assessments. The way we communicate as a Nation 
is changing, and we need to create a more robust database that enables 
data to be dynamically queried and displayed on a Web page. Floodplain 
modeling and mapping is an ever changing science, based largely on 
statistics and changes in land use and topography. We need to create an 
efficient method to quickly and efficiently update flood hazard and 
risk information and provide that information at the fingertips of end 
users on all types of digital devices.
    It is important to note that all or some of the four transformative 
recommendations have been successfully implemented in four States. 
These recommendations are not just ideas but proven concepts in 
production today.
    Thank you again for the opportunity to address this Committee on 
this important topic. I am honored to be able to provide testimony 
based on our experience with the FEMA and with the NFIP as the 
Committee considers the most efficient methods to prevent or reduce 
flooding losses.
    I would be happy to answer any questions that you may have.
    
  
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                 PREPARED STATEMENT OF SCOTT K. EDELMAN
    Vice Chair, Technical Mapping Advisory Council, and Senior Vice 
                            President, AECOM
                           September 13, 2016
    Good morning Chairman Shelby, and Members of the Subcommittee. I am 
Scott Edelman, Senior Vice President of AECOM. I have spent my career 
solely focused on solving our Nation's water related opportunities and 
challenges. I appreciate this opportunity to appear today before the 
Committee on Banking, Housing, and Urban Affairs.
    I have been involved with creating maps for FEMA since 1981, and am 
privileged to be serving as Vice Chair on the Technical Mapping 
Advisory Committee established by the 112th Congress.
    We, as a Nation, have simply endured too much pain and suffering 
due to floods.
    I believe that Roy Wright's strong support and encouragement of the 
TMAC has resulted in two reports that show a path to the next evolution 
of the NFIP. In the future, I believe that if the recommendations of 
the TMAC reports are supported by Congress and the Administration, we 
can make significant strides to reduce both the pain and suffering that 
our citizens are enduring at a record level, and the burden these 
unprecedented events continue to drain resources from our United States 
Treasury.
    Of the 29 recommendations contained in the TMAC 2015 reports, I 
believe that the three most important priorities and potential benefits 
are:

  1.  The reintroduction of a 5-year rolling plan--to allow leveraging 
        of Federal dollars;

  2.  The movement to structure-based risk assessments--to create a 
        safer Nation; and

  3.  Preparing the Nation for future conditions--to stop building new 
        problems.

    First, the reinstatement of a 5-year rolling plan allows the 
leveraging of local and State dollars. FEMA cannot make the Nation a 
safe place alone. The operating principals of FEMA's Whole Community 
doctrine is critical as applied to flood-related mitigation. Flood 
waters know no jurisdictional boundaries as they devastate lives and 
property, and therefore we need to fully engage local communities and 
make these shared responsibilities more apparent to all. When Congress 
funded Map Modernization in 2003, FEMA produced the Multi-Year Flood 
Hazard Identification Plan, MHIP. MHIP addressed every county in the 
Nation with when and how much anticipated funding would be available. 
The result was an enterprise-wide approach to maximize the return on 
Federal investments in which FEMA served as the Chief Risk Officer to 
those investment in the studies, and communities felt strong local 
ownership of the studies and results. This approach better aligned FEMA 
with State and local efforts to reduce losses of life and property.
    Second is structure-based risk assessments. We must change the 
perception that if I am just on the other side of the 100-year flood 
line I am safe. Too much time is spent trying to justify the movement 
of the flood line by a few feet when in actuality the risk of flooding 
the structure only has changed ever so slightly. Much of the problem is 
due to uncertainty of the flood line itself.

    To my knowledge, this is the only product that engineers 
        produce and communicate to the public that deals with averages 
        and not what is safe.

    We also have a great deal of uncertainty within the 
        calculations. In all actuality, the current 100-year average 
        line shown on the flood insurance maps is perhaps closer to a 
        safe design level of a 10-year event.

    Moving to a structure-based risk assessment begins to change the 
conversation from one focused on ``in vs. out'' to one that starts to 
communicate levels of risk. We must also take affordability and 
grandfathering with sunset clauses into account for our most vulnerable 
communities and constituents.
    Third, we need to prepare the Nation for the future. GAO asked FEMA 
to evaluate the impact of future conditions on the National Flood 
Insurance Program. The report concluded that by the year 2100 on 
average our floodplains will increase by 45 percent nationally, the 
number of polices will increase by 80 percent and our average loss per 
policy will increase by 50 percent based on today's dollars. This is an 
immense challenge to our country. We need to encourage local 
communities to adopt higher standards on a volunteer basis 
understanding that the higher standards results in less loss of life. 
Many communities have done this including Mecklenburg County and the 
City of Charlotte, NC. Based on their adoption of future conditions 
flood elevations, Mecklenburg County has estimated savings from flood 
damages from a single 100-year event to be over $150 Million. We need 
to stop building future problems so we can finally concentrate on 
mitigation of existing problems.
    My passion is not solely on the science but the need to help the 
Nation with this long-standing challenge and the billions of tax 
dollars that are unnecessarily wasted because of poor land use 
decisions and the attempt to tame or ignore Mother Nature. I want to 
again thank the Committee for this opportunity. I urge Members of the 
Committee to refer to the two TMAC reports for more details as a formal 
part of our testimony.
    I would be happy to answer any questions that you may have.
        RESPONSES TO WRITTEN QUESTIONS OF SENATOR TOOMEY
                       FROM ROY E. WRIGHT

Q.1. In July 2013, FEMA issued new mapping procedures for non-
accredited levees. I was pleased to see that some non-
accredited levee systems would be recognized as reducing flood 
hazard. Unfortunately, I still hear from frustrated 
Pennsylvanians who feel that local flood control structures are 
either completely ignored or treated unfairly by FEMA.
    What progress has FEMA made on including non-accredited 
levees in its FIRMs?
    How has FEMA informed communities of its new policies 
towards non-accredited levees?
    How can communities protected by non-accredited levees 
ensure that FIRMs accurately reflect the flood hazard reduction 
those levees offer?

A.1. Answer not received in time for publication.

Q.2. I understand that FEMA is in process of updating its 
claims appeals process.
    Can you provide an update on where that stands?

A.2. Answer not received in time for publication.

Q.3. Besides claims appeals, my office receives a steady volume 
of request for help in appealing FIRMs. This may be because the 
highly technical nature of the appeals process can be difficult 
and confusing.
    Are any efforts underway to improve mapping appeals? If so, 
what issues are being considered, and when can we expect to see 
changes implemented?

A.3. Answer not received in time for publication.
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
              SENATOR MENENDEZ FROM ROY E. WRIGHT

Q.1. As I mentioned above, FEMA's systems and oversight over 
its Write Your Own insurance companies and other contracts were 
severely lacking in the aftermath of Superstorm Sandy. From 
insurance companies lowballing Sandy survivors, to a broken 
appeal process that was a virtual black hole for policyholders, 
the claims process after Sandy exposed fundamental problems 
with the NFIP that demand a comprehensive overhaul.
    As you know, I've worked for the past several years to 
first expose and then address the most egregious shortcomings.
    Can you give the Committee a sense of the reforms that have 
been made since the aftermath of Sandy and if they are adequate 
to prevent another debacle like we saw after Sandy?
    Should the people of New Jersey be confident that they 
won't have to go through the same ordeal they did after Sandy 
when the next storm strikes?

A.1. Answer not received in time for publication.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR WARREN
                       FROM ROY E. WRIGHT

Q.1. Will FEMA allow attenuation of wave setup in back-bay or 
inland areas to be guided through the use of high water marks 
(HWMs) that are available for the Blizzard of 1978 storm in the 
Towns of Scituate, Marshfield, and Duxbury? This historical 
storm has been shown to produce storm surge levels at or above 
the 1 percent-annual-chance stillwater level for these areas. 
The HWMs would be used (with judgment) to assess the 
hydrodynamics and propagation of surge into the enclosed 
estuarine areas. This is the same method that was used for the 
successful appeals of the Preliminary 2013 FIS study for the 
Towns of Scituate, Marshfield, and Duxbury.

A.1. Answer not received in time for publication.

Q.2. The U.S. Army Corps of Engineers (USACE) was authorized by 
Congress in January 2013 in the Disaster Relief Appropriations 
Act of 2013 (Public Law 113-2) to conduct the North Atlantic 
Coast Comprehensive Study (NACCS). A core component of the 
NACCS study was a numerical modeling effort that produced 
updated storm surge and wave annual-exceedance probabilities 
for extreme coastal storm events for the Mid- to North-Atlantic 
region, from Virginia to Maine. The NACCS study provides a 
characterization of both synthetic tropical storms and 
historical extratropical storms that can contribute to probable 
coastal flood hazards in the New England area. The NACCS study 
also makes use of two-dimensional (2-D) hydrodynamics and wave 
models to capture the spatial variability in storm surge and 
wave conditions along the complex coastline of Massachusetts. 
Modeled 1 percent annual chance water levels and wave heights 
from the NACCS study represent an improvement to the 
methodologies used by FEMA to produce the Nov. 4, 2016 Flood 
Insurance Rate Maps (FIRMs) for the Towns of Scituate and 
Marshfield, and the Cape Cod Bay shoreline of Duxbury. Will 
FEMA allow the use of 1 percent annual chance SWELs and 
significant wave heights from the NACCs study to be used as 
input conditions for the WHAFIS and wave run-up analyses?

A.2. Answer not received in time for publication.
                                ------                                


       RESPONSES TO WRITTEN QUESTIONS OF SENATOR SCHUMER
                       FROM ROY E. WRIGHT

Q.1. Mr. Wright, as you are aware, New York City has submitted 
a technical appeal disputing FEMA's Preliminary maps and I know 
that--FEMA has set up an independent review board to review the 
City's appeal.
    First, can you provide an update on the status of the 
independent review board's analysis? Where do things stand and 
when do you expect to for the board to make a determination?
    Second, is FEMA prepared to revise the New York City maps 
accordingly if it is determined by the board that the 
preliminary maps are not as accurate as they should have been?

A.1. Answer not received in time for publication.

Q.2. Mr. Wright, I have asked that you take steps to ensure 
that FEMA has and exercises the necessary authority to properly 
oversee the WYO carriers, third-party service providers and any 
firms that they may all hire.
    I was pleased to see that you acted quickly in responding 
to the New York AG's investigation and recommended that the 
engineering firm HiRise be disbarred from participating in the 
program.
    However, do you plan to seek to disbar any WYOs or firms 
they may have hired based on their actions in the aftermath of 
Sandy?
    What information or developments are necessary for FEMA to 
take such action?
    What is the timeframe for making such a determination with 
regard to seeking disbarment of WYOs or other firms?
    Further, what about the legal counsel hired by the WYOs to 
represent their interests in cases filed by Sandy victims? Do 
you plan to seek to prohibit any of these firms from being able 
to handle future litigation matters on behalf of the WYOs based 
on their actions in handling cases that arose from Sandy?

A.2. Answer not received in time for publication.

Q.3. Mr. Wright, can you provide me an update on the Sandy 
Claims Review Process?
    Additionally, I'd like to know more about one specific 
piece of the process. It has been raised with my office that 
FEMA adjusters in the Sandy Claims Review Process are relying 
on the original engineering reports from suspect engineering 
firms, like HiRise, as a basis for determining what homeowners 
should be paid through this re-review process.
    First, is that true?
    Second, has FEMA gone back to see if these engineering 
reports were ever changed or manipulated to alter the 
conclusions made regarding the actual damage sustained in 
Sandy?
    Third, can you tell me what is FEMA doing to ensure that 
the engineering reports used as a basis for making 
determinations in the Sandy Claims Review Process are based on 
accurate reviews of the damage to these homes? Finally, have 
any of the WYOs that hired these suspect engineering firms been 
asked to or required to pay for new engineering reports to be 
filed? Are any of them doing so?

A.3. Answer not received in time for publication.
                                ------                                


         RESPONSES TO WRITTEN QUESTIONS OF SENATOR KIRK
                       FROM ROY E. WRIGHT

Q.1. The NFIP rate plan is outmoded and does not reflect 
insurance industry best practices. For example, the Institute 
for Business and Home Safety (IBHS), as well as catastrophe 
modelers, have pointed out the differences between riverine 
flooding and storm surge. Since riverine flooding is generally 
inland and storm surge is generally coastal, most experts 
believe there is an unjustified disparity in the rates charged 
to policyholders in the 30 zones across the country, not to 
mention the disparity created by the significant subsidization 
of premiums charged to many policyholders.
    Are some policyholders paying too much while others are 
paying too little, independent of the subsidies built into the 
program?
    How do your propose modernizing the NFIP rate plan to 
eliminate this disparity?

A.1. Answer not received in time for publication.

Q.2. Reinsuring NFIP exposure can transfer risk from taxpayers 
to the private market, provide financial stability, and 
facilitate private market competition. There has been much 
discussion about how robust and competitively priced the 
catastrophe risk market is at this time, but the price and 
availability of reinsurance changes with the weather and other 
market conditions, resulting in year-to-year volatility. This 
volatility could place the NFIP in jeopardy, and private 
carriers could be discouraged from entering the market. Longer-
term reinsurance arrangements not only limit volatility, but 
can also facilitate more robust data analytics and pricing 
sophistication for the flood events that are most challenging 
for the private market.
    How do you perceive the role of reinsurance as a tool to 
reduce the Federal Government's exposure to loss, and to 
encourage private insurers to write direct flood coverage?
    I understand that you are currently negotiating reinsurance 
coverage for the coming year. Are you investigating the 
availability and potential benefits of longer term reinsurance 
coverage?

A.2. Answer not received in time for publication.

Q.3. Presumably Congress will reauthorize the NFIP next year 
and the NFIP will continue to be the primary flood insurance 
market for homeowners and businesses. In the meantime, FEMA can 
take important steps to improve the program with its existing 
authority. For example, FEMA should look to industry best 
practices to improve customer communications so there is better 
public understanding of the underwriting and rating processes, 
and up-front clarity on which losses are covered and which 
losses are not. FEMA also has the authority to issue bulletins 
and other guidance so that FEMA's claim handling and 
engineering investigation requirements are objective and 
transparent. By meeting customer needs and expectations, and by 
providing clear guidance to insurance companies participating 
in the NFIP, there will be less policyholder frustration, fewer 
complaints and less litigation.
    What is FEMA doing to make the program more customer-
centric and how is FEMA communicating with the Write Your Own 
carriers to improve the customer experience?

A.3. Answer not received in time for publication.

Q.4. FEMA recently proposed removing the Write Your Own (WYO) 
Financial Assistance/Subsidy Arrangement from the Code of 
Federal Regulations (CFR) so FEMA can negotiate individual 
contracts with the insurance companies that serve as FEMA' s 
agents for the sale and administration of flood insurance 
policies.
    Do you believe that some WYO companies perform better than 
others and, if so, what measures will you take when negotiating 
new contracts to make sure that better performing companies 
remain in the program?
    Since you will be negotiating individual contracts, are you 
concerned that contracts with different companies on different 
terms could create competitive imbalances?

A.4. Answer not received in time for publication.

Q.5. You have stated that the Arrangement would be removed from 
the CFR, but will continue to be available on the FEMA website. 
Your WYO partner companies currently rely on the fact that 
their contractual relationship with FEMA under the Arrangement 
conforms to Federal law, which makes clear that the Federal 
Government assumes liability for losses under NFIP policies.
    Why would the Arrangement continue to be accessible if a 
new and presumably different contract is to be negotiated with 
each WYO carrier? Will the current Arrangement apply in any way 
to the new individualized contracts and, if so, are there any 
legislative or regulatory changes necessary to ensure that the 
new contracts conform to federal law so the essential nature of 
the WYO relationship is not disrupted?

A.5. Answer not received in time for publication.
              Additional Material Supplied for the Record
         FEMA--``TECHNICAL MAPPING ADVISORY COUNCIL OVERVIEW''
         

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LETTER SUBMITTED BY TOM SALOMONE, 2016 PRESIDENT, NATIONAL ASSOCIATION 
                        OF REALTORS
                        

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LETTER SUBMITTED BY CHAD BERGINNIS, EXECUTIVE DIRECTOR, ASSOCIATION OF 
                       STATE FLOODPLAIN MANAGERS


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LETTER SUBMITTED BY CHAD BERGINNIS, EXECUTIVE DIRECTOR, ASSOCIATION OF 
STATE FLOODPLAIN MANAGERS AND JAMES M. DRINAN, JD, EXECUTIVE DIRECTOR, 
                     AMERICAN PLANNING ASSOCIATION
                     
 
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   JOINT LETTER SUBMITTED BY AMERICAN BANKERS ASSOCIATION, AMERICAN 
    INSURANCE ASSOCIATION, COUNCIL OF INSURANCE AGENTS AND BROKERS, 
  FINANCIAL SERVICES ROUNDTABLE, THE INDEPENDENT INSURANCE AGENTS AND 
     BROKERS OF AMERICA, NATIONAL ASSOCIATION OF MUTUAL INSURANCE 
COMMITTEES, NATIONAL ASSOCIATION OF PROFESSIONAL INSURANCE AGENTS, AND 
    PROPERTY CASUALTY INSURERS ASSOCIATION OF AMERICA REGARDING THE 
             PRINCIPLES FOR FLOOD INSURANCE REAUTHORIZATION


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