[House Report 116-261]
[From the U.S. Government Publishing Office]


116th Congress }                                             { Report
                        HOUSE OF REPRESENTATIVES
 1st Session   }                                             { 116-261

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



 
   NATIONAL FLOOD INSURANCE PROGRAM ADMINISTRATIVE REFORM ACT OF 2019

                                _______
                                

October 28, 2019.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Ms. Waters, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3111]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 3111) to make administrative reforms to the 
National Flood Insurance Program to increase fairness and 
accuracy and protect the taxpayer from program fraud and abuse, 
and for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     9
Background and Need for Legislation..............................     9
Section-by-Section Analysis......................................    10
Hearings.........................................................    12
Committee Consideration..........................................    13
Committee Votes and Roll Call Votes..............................    13
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    15
Statement of Performance Goals and Objectives....................    15
New Budget Authority and CBO Cost Estimate.......................    15
Committee Cost Estimate..........................................    17
Unfunded Mandate Statement.......................................    17
Advisory Committee...............................................    18
Application of Law to the Legislative Branch.....................    18
Earmark Statement................................................    18
Duplication of Federal Programs..................................    18
Changes to Existing Law..........................................    18

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``National Flood 
Insurance Program Administrative Reform Act of 2019''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Pilot program for properties with preexisting conditions.
Sec. 3. Penalties for fraud and false statements in the National Flood 
Insurance Program.
Sec. 4. Enhanced policyholder appeals process rights.
Sec. 5. Deadline for approval of claims.
Sec. 6. Litigation process oversight and reform.
Sec. 7. Prohibition on hiring disbarred attorneys.
Sec. 8. Technical assistance reports.
Sec. 9. Improved disclosure requirement for standard flood insurance 
policies.
Sec. 10. Reserve Fund amounts.
Sec. 11. Sufficient staffing for Office of Flood Insurance Advocate.
Sec. 12. Federal Flood Insurance Advisory Committee.
Sec. 13. Interagency guidance on compliance.
Sec. 14. GAO study of claims adjustment practices.
Sec. 15. GAO study of flood insurance coverage treatment of earth 
movement.
Sec. 16. Definitions.

SEC. 2. PILOT PROGRAM FOR PROPERTIES WITH PREEXISTING CONDITIONS.

  Section 1311 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4018) is amended by adding at the end the following new subsection:
  ``(c) Pilot Program for Investigation of Preexisting Structural 
Conditions.--
          ``(1) Voluntary program.--The Administrator shall carry out a 
        pilot program under this subsection to provide for companies 
        participating in the Write Your Own program (as such term is 
        defined in section 1370(a) (42 U.S.C. 4121(a))) to investigate 
        preexisting structural conditions of insured properties and 
        potentially insured properties that could result in the denial 
        of a claim under a policy for flood insurance coverage under 
        this title in the event of a flood loss to such property. 
        Participation in the pilot program shall be voluntary on the 
        part of Write Your Own companies.
          ``(2) Investigation of properties.--Under the pilot program 
        under this subsection, a Write Your Own company participating 
        in the program shall--
                  ``(A) provide in policies for flood insurance 
                coverage under this title covered by the program that, 
                upon the request of the policyholder, the company shall 
                provide for--
                          ``(i) an investigation of the property 
                        covered by such policy, using common methods, 
                        to determine whether preexisting structural 
                        conditions are present that could result in the 
                        denial of a claim under such policy for flood 
                        losses; and
                          ``(ii) if such investigation is not 
                        determinative, an on-site inspection of the 
                        property to determine whether such preexisting 
                        structural conditions are present;
                  ``(B) upon completion of an investigation or 
                inspection pursuant to subparagraph (A) that determines 
                that such a preexisting structural condition is present 
                or absent, submit a report to the policyholder and 
                Administrator describing the condition; and
                  ``(C) impose a surcharge on each policy described in 
                subparagraph (A) in such amount that the Administrator 
                determines is appropriate to cover the costs of 
                investigations and inspections performed pursuant to 
                such policies and reimburse Write Your Own companies 
                participating in the program under this subsection for 
                such costs.
          ``(3) Interim report.--Not later than December 31, 2023, the 
        Administrator shall submit a report to the Committee on 
        Financial Services of the House of Representatives and the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        describing the operation of the pilot program to that date.
          ``(4) Sunset.--The Administrator may not provide any policy 
        for flood insurance described in paragraph (2)(A) after 
        December 31, 2024.
          ``(5) Final report.--Not later than March 31, 2025, the 
        Administrator shall submit a final report regarding the pilot 
        program under this section to the Committee on Financial 
        Services of the House of Representatives and the Committee on 
        Banking, Housing, and Urban Affairs of the Senate. The report 
        shall include any findings and recommendations of the 
        Administrator regarding the pilot program.''.

SEC. 3. PENALTIES FOR FRAUD AND FALSE STATEMENTS IN THE NATIONAL FLOOD 
                    INSURANCE PROGRAM.

  Part C of chapter II of the National Flood Insurance Act of 1968 (42 
U.S.C. 4081 et seq.) is amended by adding at the end the following new 
section:

``SEC. 1349. PENALTIES FOR FRAUD AND FALSE STATEMENTS IN THE NATIONAL 
                    FLOOD INSURANCE PROGRAM.

  ``(a) Prohibited Acts.--A person shall not knowingly make a false, 
fictitious, or fraudulent statement, production, or submission in 
connection with the proving or adjusting of a claim for flood insurance 
coverage made available under this Act. Such prohibited acts include--
          ``(1) knowingly forging an engineering report, claims 
        adjustment report or technical assistance report used to 
        support a claim determination;
          ``(2) knowingly making any materially false, fictitious, or 
        fraudulent statement or representation in an engineering 
        report, claims adjustment report, or technical assistance 
        report to support a claim determination that results in a 
        wrongful denial or substantial payment error of flood insurance 
        coverage; and
          ``(3) knowingly submitting a materially false, fictitious, or 
        fraudulent claim that results in wrongful payment of flood 
        insurance coverage.
  ``(b) Definition.--For purposes of this section, the term `knowingly' 
means having actual awareness of the prohibitions under this part and 
acting deliberately in violation of such prohibitions.
  ``(c) Administrative Remedy.--Prior to any legal action being taken 
related to this section, all administrative remedies shall be 
exhausted.
  ``(d) Rule of Construction.--This section shall not be construed--
          ``(1) to prevent the Federal Government from bringing action 
        against a company or individual under applicable statutes, 
        including the False Claims Act; and
          ``(2) as creating any action, private right of action, or 
        remedy not otherwise provided by this title or under Federal 
        law.
  ``(e) State action.--Any person found to have violated subsection (a) 
shall be referred to the appropriate and relevant State licensing 
agency by the Attorney General.''.

SEC. 4. ENHANCED POLICYHOLDER APPEALS PROCESS RIGHTS.

  (a) Establishment.--Part C of chapter II of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4081 et seq.), as amended by the 
preceding provisions of this Act, is further amended by adding at the 
end the following new section:

``SEC. 1350. APPROVAL OF DECISIONS RELATING TO FLOOD INSURANCE 
                    COVERAGE.

  ``(a) In General.--The Administrator shall establish an appeals 
process to enable holders of a flood insurance policy provided under 
this title to appeal decisions, with respect to the disallowance, in 
whole or in part, of any claims for losses covered by flood insurance. 
Such appeals shall be limited to the claim or portion of the claim 
disallowed.
  ``(b) Appeal Decision.--Upon a decision in an appeal under subsection 
(a), the Administrator shall provide the policyholder with a written 
appeal decision. The appeal decision shall explain the Administrator's 
determination to uphold, modify, or overturn the decision. The 
Administrator may direct the Write Your Own company to take action 
necessary to resolve the appeal, to include re-inspection, re-
adjustment, or payment, as appropriate.
  ``(c) Deadline for Appeals Decision.-- The Administrator shall issue 
an appeals decision pursuant to subsection (b) not later than the 
expiration of the 120-day period beginning upon the day on which the 
Administrator acknowledges receipt of a request by the policyholder to 
pursue an appeal of the initial determination regarding approval, 
disapproval, or amount of payment by the Administrator. In cases where 
extraordinary circumstances, as established by regulation, are 
demonstrated, the 120-day period may be extended by additional 
successive periods of 30 days.
  ``(d) Administrative Remedy.--A policyholder shall exhaust all 
administrative remedies, including submission of disputed claims to 
appeal under subsection (a), prior to commencing legal action on a 
disputed claim.
  ``(e) Rules of Construction.--This section shall not be construed 
as--
          ``(1) making the Federal Emergency Management Agency or the 
        Administrator a party to the flood insurance contract; or
          ``(2) creating any action or remedy not otherwise provided by 
        this title.
  ``(f) Policyholder Litigation.--This section shall not be construed 
to prevent a policyholder from bringing legal action against the 
Federal Emergency Management Agency or a Write Your Own company 
following the exhaustion of all administrative remedies and pursuant to 
applicable statute.''.
  (b) Maintenance of Litigation Rights.--Section 1341 of the National 
Flood Insurance Act of 1968 (42 U.S.C. 4072) is amended by adding after 
the period at the end the following: ``For purposes of this section, 
the time from which the Administrator has acknowledged receipt of a 
request by the policyholder to pursue an appeal of the initial 
determination regarding approval, disapproval, or amount of payment by 
the Administrator until the Administrator mails a final determination 
of such appeal shall not be considered towards the one year statute of 
limitation under this Act. However, this section shall not be construed 
as creating any action or remedy not otherwise provided by this 
title.''.
  (c) Repeal.--Section 205 of the Bunning-Bereuter-Blumenauer Flood 
Insurance Reform Act of 2004 (42 U.S.C. 4011 note) is hereby repealed.

SEC. 5. DEADLINE FOR APPROVAL OF CLAIMS.

  (a) In General.--Section 1312 of the National Flood Insurance Act of 
1968 (42 U.S.C. 4019) is amended--
          (1) in subsection (a), by striking ``The Administrator'' and 
        inserting ``Subject to other provisions of this section, the 
        Administrator''; and
          (2) by adding at the end the following new subsection:
  ``(d) Deadline for Approval of Claims.--
          ``(1) In general.--The Administrator shall provide that, in 
        the case of any claim for damage to or loss of property under 
        flood insurance coverage made available under this title, an 
        initial determination regarding approval of a claim for payment 
        or disapproval of the claim be made, and notification of such 
        determination be provided to the insured making such claim, not 
        later than the expiration of the 120-day period (as such period 
        may be extended pursuant to paragraph (2)) beginning upon the 
        day on which the policyholder submits a signed proof of loss 
        detailing the damage and amount of the loss. Payment of 
        approved claims shall be made as soon as possible after such 
        approval.
          ``(2) Extension of deadline.--The Administrator shall--
                  ``(A) provide that the period referred to in 
                paragraph (1) may be extended by additional successive 
                periods of 30 days in cases where extraordinary 
                circumstances are demonstrated; and
                  ``(B) establish, by regulation, criteria for 
                demonstrating such extraordinary circumstances.''.
  (b) Applicability.--The amendments made by subsection (a) shall apply 
to any claim under flood insurance coverage made available under the 
National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.) pending 
on the date of the enactment of this Act and any claims made after such 
date of enactment.

SEC. 6. LITIGATION PROCESS OVERSIGHT AND REFORM.

  (a) In General.--Part C of chapter II of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4081 et seq.), as amended by the preceding 
provisions of this Act, is further amended by adding at the end the 
following new section:

``SEC. 1351. OVERSIGHT OF LITIGATION.

  ``(a) Oversight.--The Administrator shall monitor and oversee 
litigation conducted by Write Your Own companies arising under 
contracts for flood insurance sold pursuant to this title, to ensure 
that--
          ``(1) litigation expenses are reasonable, appropriate, and 
        cost-effective; and
          ``(2) Write Your Own companies comply with guidance and 
        procedures established by the Administrator regarding the 
        conduct of litigation.
  ``(b) Denial of Reimbursement for Expenses.--The Administrator may 
deny reimbursement for litigation expenses that are determined to be 
unreasonable, excessive, contrary to guidance issued by the 
Administrator, or outside the scope of any arrangement entered into 
with a Write Your Own company.
  ``(c) Joint Defense.--
          ``(1) Authority.--The Administrator and the Write Your Own 
        companies may enter into, and operate under, a joint defense 
        agreement for any claim or lawsuit, or multiple claims or 
        lawsuits, arising under a contract of flood insurance.
          ``(2) Free flow of information.--Under such joint defense 
        agreement, there may be the free flow of information between 
        the Write Your Own companies, the Administrator, the United 
        States Department of Justice, and legal counsel for the Write 
        Your Own companies for the purpose of litigation coordination 
        and to allow the Administrator to perform oversight 
        responsibility of such litigation.
          ``(3) Arrangement.-- Such joint defense agreement may be 
        included in the Arrangement between the Administrator and the 
        Write Your Own companies.
          ``(4) Regulations.--The Administrator may issue rules or 
        regulations or provide such formal guidance as the 
        Administrator considers necessary and appropriate in order to 
        further such joint defense agreement with the Write Your Own 
        companies.''.
  (b) Implementation.--The Administrator of the Federal Emergency 
Management Agency shall initiate compliance with section 1351(c) of the 
National Flood Insurance Act of 1968, as added by the amendment made by 
subsection (a) of this section, not later than the expiration of the 
12-month period beginning on the date of the enactment of this Act.

SEC. 7. PROHIBITION ON HIRING DISBARRED ATTORNEYS.

  Part C of chapter II of the National Flood Insurance Act of 1968 (42 
U.S.C. 4081 et seq.), as amended by the preceding provisions of this 
Act, is further amended by adding at the end the following new section:

``SEC. 1352. PROHIBITION ON HIRING DISBARRED ATTORNEYS.

  ``The Administrator may not at any time newly employ in connection 
with the flood insurance program under this title any attorney who has 
been suspended or disbarred by any court, bar, or Federal or State 
agency to which the individual was previously admitted to practice.''.

SEC. 8. TECHNICAL ASSISTANCE REPORTS.

  (a) Use.--Section 1312 of the National Flood Insurance Act of 1968 
(42 U.S.C. 4019), as amended by the preceding provisions of this Act, 
is further amended by adding at the end the following new subsection:
  ``(e) Use of Technical Assistance Reports.--When adjusting claims for 
any damage to or loss of property which is covered by flood insurance 
made available under this title, the Administrator may rely upon 
technical assistance reports, as such term is defined in section 1312A, 
only if such reports are final and are prepared in compliance with 
applicable State and Federal laws regarding professional licensure and 
conduct.''.
  (b) Disclosure.--The National Flood Insurance Act of 1968 is amended 
by inserting after section 1312 (42 U.S.C. 4019) the following new 
section:

``SEC. 1312A. DISCLOSURE OF TECHNICAL ASSISTANCE REPORTS.

  ``(a) In General.--Notwithstanding section 552a of title 5, United 
States Code, upon request by a policyholder, the Administrator shall 
provide a true, complete, and unredacted copy of any technical 
assistance report that the Administrator relied upon in adjusting and 
paying for any damage to or loss of property insured by the 
policyholder and covered by flood insurance made available under this 
title. Such disclosures shall be in addition to any other right of 
disclosure otherwise made available pursuant such section 552a or any 
other provision of law.
  ``(b) Direct Disclosure by Write Your Own Companies and Direct 
Servicing Agents.--A Write Your Own company or direct servicing agent 
in possession of a technical assistance report subject to disclosure 
under subsection (a) may disclose such technical assistance report 
without further review or approval by the Administrator.
  ``(c) Definitions.--For purposes of this section, the following 
definitions shall apply:
          ``(1) Policyholder.--The term `policyholder' means a person 
        or persons shown as an insured on the declarations page of a 
        policy for flood insurance coverage sold pursuant to this 
        title.
          ``(2) Technical assistance report.--The term `technical 
        assistance report' means a report created for the purpose of 
        furnishing technical assistance to an insurance claims adjuster 
        assigned by the National Flood Insurance Program, including by 
        engineers, surveyors, salvors, architects, and certified public 
        accounts.''.

SEC. 9. IMPROVED DISCLOSURE REQUIREMENT FOR STANDARD FLOOD INSURANCE 
                    POLICIES.

  (a) In General.--Section 100234 of the Biggert-Waters Flood Insurance 
Reform Act of 2012 (42 U.S.C. 4013a) is amended by adding at the end 
the following new subsections:
  ``(c) Disclosure of Coverage.--
          ``(1) Disclosure sheet.--Each policy under the National Flood 
        Insurance Program shall include a standard disclosure sheet 
        that is produced by the Administrator that sets forth, in plain 
        language--
                  ``(A) the definition of the term `flood' for purposes 
                of coverage under the policy;
                  ``(B) a description of what type of flood forces are 
                necessary so that losses from an event are covered 
                under the policy, including overflow of inland or tidal 
                waves, unusual and rapid accumulation or runoff of a 
                surface any source, and mudflow;
                  ``(C) a statement acknowledging that a standard flood 
                insurance policy does not cover basement improvements, 
                such as finished walls, floors, and ceilings, or 
                personal property kept in a basement;
                  ``(D) a statement acknowledging a standard flood 
                insurance policy does not include coverage for personal 
                property, but such coverage may be purchased, for some 
                personal property contained in a basement, as well as 
                personal belongings contained elsewhere in the 
                dwelling;
                  ``(E) a statement of the other types and 
                characteristics of losses that are not covered under 
                the policy;
                  ``(F) a statement that the disclosure sheet provides 
                general information about the policyholder's standard 
                flood insurance policy;
                  ``(G) a statement that the standard flood insurance 
                policy, together with the endorsements and declarations 
                page, make up the official contract and are controlling 
                in the event that there is any difference between the 
                information on the disclosure sheet and the information 
                in the policy;
                  ``(H) a statement that, if the policyholder has any 
                questions regarding information in the disclosure sheet 
                or policy, the policyholder should contact the entity 
                selling the policy on behalf of the Program, together 
                with contact information sufficient to allow the 
                policyholder to contact such entity; and
                  ``(I) any other information that the Administrator 
                determines will be helpful to policyholder in 
                understanding flood insurance coverage.
          ``(2) Acknowledgment sheet.--Each policy application under 
        the National Flood Insurance Program shall include an 
        acknowledgment sheet on which the policyholder shall 
        affirmatively--
                  ``(A) acknowledge that the policyholder received the 
                disclosure sheet required under paragraph (1);
                  ``(B) accept or decline coverage for personal 
                property;
                  ``(C) accept or decline other optional coverage that 
                may be available;
                  ``(D) acknowledge the policyholder's understanding 
                that the standard flood insurance policy, together with 
                the endorsements and declarations page, make up the 
                official contract and are controlling in the event that 
                there is any difference between the information on the 
                acknowledgment sheet and the information in the policy; 
                and
                  ``(E) acknowledge that the policyholder has been 
                provided and has reviewed a summary, which may be the 
                policy declarations page, of the total cost, amount and 
                extent of insurance coverage provided under the policy.
  ``(d) Rule of Construction.--This section shall not be construed to 
void or alter the coverage terms of the underlying standard flood 
insurance policy and the corresponding endorsements. In the event that 
the customer does not affirmatively acknowledge the requirements under 
subsection (c)(2), a Write Your Own company may still issue the policy 
on behalf of the National Flood Insurance Program under such terms.''.
  (b) Repeals.--Sections 202 and 203 of the Bunning-Bereuter-Blumenauer 
Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 note) are hereby 
repealed.

SEC. 10. RESERVE FUND AMOUNTS.

  Section 1310 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4017) is amended by adding at the end the following new subsection:
  ``(g) Crediting of Reserve Fund Amounts.--Funds collected pursuant to 
section 1310A may be credited to the Fund under this section to be 
available for the purpose described in subsection (d)(1).''.

SEC. 11. SUFFICIENT STAFFING FOR OFFICE OF FLOOD INSURANCE ADVOCATE.

  (a) In General.--Section 24 of the Homeowner Flood Insurance 
Affordability Act of 2014 (42 U.S.C. 4033) is amended by adding at the 
end the following new subsection:
  ``(c) Staff.--The Administrator shall ensure that the Flood Insurance 
Advocate has sufficient staff to carry out all of the duties and 
responsibilities of the Advocate under this section.''.
  (b) Timing.--The Administrator of the Federal Emergency Management 
Agency shall take such actions as may be necessary to provide for full 
compliance with section 24(c) of the Homeowner Flood Insurance 
Affordability Act of 2014, as added by the amendment made by subsection 
(a) of this section, not later than the expiration of the 180-day 
period beginning on the date of the enactment of this Act.

SEC. 12. FEDERAL FLOOD INSURANCE ADVISORY COMMITTEE.

  Section 1318 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4025) is amended to read as follows:

``SEC. 1318. FEDERAL FLOOD INSURANCE ADVISORY COMMITTEE.

  ``(a) Establishment.--There is established an advisory committee to 
be known as the Federal Flood Insurance Advisory Committee (in this 
section referred to as the `Committee').
  ``(b) Membership.--
          ``(1) Members.--The Committee shall consist of--
                  ``(A) the Administrator of the Federal Emergency 
                Management Agency (in this section referred to as the 
                `Administrator'), or the designee thereof; and
                  ``(B) additional members appointed by the 
                Administrator or the designee of the Administrator, who 
                shall include--
                          ``(i) three representatives of Write Your Own 
                        companies;
                          ``(ii) one individual who served in the past, 
                        or is currently serving, as an insurance 
                        regulator of a State, the District of Columbia, 
                        the Commonwealth of Puerto Rico, Guam, the 
                        Commonwealth of the Northern Mariana Islands, 
                        the Virgin Islands, American Samoa, or any 
                        federally-recognized Indian tribe;
                          ``(iii) one representative of the financial 
                        or insurance sectors who is involved in risk 
                        transfers, including reinsurance, resilience 
                        bonds, and other insurance-linked securities;
                          ``(iv) one actuary with demonstrated high-
                        level knowledge of catastrophic risk insurance;
                          ``(v) two insurance agents or brokers with 
                        demonstrated experience with the sale of flood 
                        insurance under the National Flood Insurance 
                        Program, one of whom shall have demonstrated 
                        expertise in the challenges in insuring low-
                        income communities;
                          ``(vi) one insurance claims specialist;
                          ``(vii) one representative of a recognized 
                        consumer advocacy organization; and
                          ``(viii) one representative from an academic 
                        institution who has demonstrated expertise in 
                        insurance.
          ``(2) Qualifications.--In appointing members under paragraph 
        (1)(C), the Administrator shall, to the maximum extent 
        practicable, ensure the membership of the Committee has a 
        balance of members reflecting geographic diversity, including 
        representation from areas inland or with coastline identified 
        by the Administrator as at high risk for flooding or as areas 
        having special flood hazards.
  ``(c) Duties.--The Administrator shall submit, and the Committee 
shall review and make recommendations on, matters related to the 
insurance aspects of the National Flood Insurance Program, including 
ratemaking, technology to administer insurance, risk assessment, 
actuarial practices, claims practices, sales and insurance delivery, 
compensation and allowances, the public-private partnership under the 
Write Your Own arrangement, general best insurance practices, and any 
significant changes proposed to be made regarding the operation of the 
National Flood Insurance Program.
  ``(d) Chairperson.--The members of the Committee shall elect one 
member to serve as the chairperson of the Committee (in this section 
referred to as the `Chairperson').
  ``(e) Compensation.--Members of the Committee shall receive no 
additional compensation by reason of their service on the Committee. 
Members may be reimbursed by the Federal Government for travel 
expenses, including per diem in lieu of subsistence, at rates 
consistent with rates authorized for employees of Federal agencies 
under subchapter 1 of chapter 57 of title 5, United States Code, while 
away from home or regular places of business in performance of service 
for the Committee.
  ``(f) Meetings and Actions.--
          ``(1) In general.--The Committee shall meet not less 
        frequently than twice each year at the request of the 
        Chairperson or a majority of its members, and may take action 
        by a vote of the majority of the members in accordance with the 
        Committee's charter.
          ``(2) Initial meeting.--The Administrator, or a person 
        designated by the Administrator, shall request and coordinate 
        the initial meeting of the Committee.
  ``(g) Transparency; FACA.--To the greatest extent possible, the 
Committee shall operate in a transparent manner that adheres to the 
requirements of the Federal Advisory Committee Act, with the exception 
that the Committee shall be permitted to freely communicate both during 
and between meetings under paragraph (f) in a confidential manner to 
discuss non-public information regarding the operations of the National 
Flood Insurance Program and other sensitive and non-public issues. If 
such communication occurs, the Committee shall, to the greatest extent 
possible, report a summary of such discussions in an appropriate public 
manner.
  ``(h) Staff of FEMA.--Upon the request of the Chairperson, the 
Administrator may detail, on a nonreimbursable basis, personnel of the 
Federal Emergency Management Agency to assist the Committee in carrying 
out its duties.
  ``(i) Powers.--In carrying out this section, the Committee may hold 
hearings, receive evidence and assistance, provide information, and 
conduct research, as it considers appropriate.
  ``(j) Reports to Congress.--The Administrator, on an annual basis, 
shall report to the Committee on Financial Services of the House of 
Representatives, the Committee on Banking, Housing, and Urban Affairs 
of the Senate, and the Office of Management and Budget on--
          ``(1) the recommendations made by the Committee;
          ``(2) actions taken by the Federal Emergency Management 
        Agency to address such recommendations to improve the insurance 
        aspects of the national flood insurance program; and
          ``(3) any recommendations made by the Committee that have 
        been deferred or not acted upon, together with an explanatory 
        statement.
  ``(k) Rule of Construction.--This section shall not be construed to 
eliminate or alter any requirement on the Administrator associated with 
the notification or consultation of specified individuals or groups of 
individuals as required elsewhere by statute.''.

SEC. 13. INTERAGENCY GUIDANCE ON COMPLIANCE.

  The Federal entities for lending regulation (as such term is defined 
in section 3(a) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4003(a))), in consultation with the Administrator of the Federal 
Emergency Management Agency, shall update and reissue the document 
entitled ``Interagency Questions and Answers Regarding Flood 
Insurance'' not later than the expiration of the 12-month period 
beginning on the date of the enactment of this Act and not less 
frequently than biennially thereafter.

SEC. 14. GAO STUDY OF CLAIMS ADJUSTMENT PRACTICES.

  The Comptroller General of the United States shall conduct a study of 
the policies and practices for adjustment of claims for losses under 
flood insurance coverage made available under the National Flood 
Insurance Act, which shall include--
          (1) a comparison of such policies and practices with the 
        policies and practices for adjustment of claims for losses 
        under other insurance coverage;
          (2) an assessment of the quality of the adjustments conducted 
        and the effects of such policies and practices on such quality;
          (3) identification of any incentives under such policies and 
        practices that affect the speed with which such adjustments are 
        conducted; and
          (4) identification of the affects of such policies and 
        practices on insureds submitting such claims for losses.
Not later than the expiration of the 18-month period beginning on the 
date of the enactment of this Act, the Comptroller General shall submit 
a report to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban 
Affairs of the Senate regarding the findings and conclusions of the 
study conducted pursuant to this section.

SEC. 15. GAO STUDY OF FLOOD INSURANCE COVERAGE TREATMENT OF EARTH 
                    MOVEMENT.

  The Comptroller General of the United States shall conduct a study of 
the treatment, under flood insurance coverage made available under the 
National Flood Insurance Act, of earth movement and subsidence, 
including earth movement and subsidence caused by flooding, which shall 
include--
          (1) identification and analysis of the effects of such 
        treatment on the National Flood Insurance Program and insureds 
        under the program;
          (2) an assessment of the availability and affordability of 
        coverage in the private insurance market for earth movement and 
        subsidence caused by flooding;
          (3) an assessment of the effects on the National Flood 
        Insurance Program of covering earth movement and subsidence 
        caused by flooding; and
          (4) a projection of the increased premiums that would be 
        required to make coverage for earth movement losses actuarially 
        sound and not fiscally detrimental to the continuation of the 
        National Flood Insurance Program.
Not later than the expiration of the 18-month period beginning on the 
date of the enactment of this Act, the Comptroller General shall submit 
a report to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban 
Affairs of the Senate regarding the findings and conclusions of the 
study conducted pursuant to this section.

SEC. 16. DEFINITIONS.

  (a) National Flood Insurance Act of 1968.--Subsection (a) of section 
1370 of the National Flood Insurance Act of 1968 (42 U.S.C. 4121(a)) is 
amended--
          (1) in paragraph (14), by striking ``and'' at the end;
          (2) in paragraph (15), by striking the period at the end and 
        inserting a semicolon; and
          (3) by adding at the end the following new paragraphs:
          ``(16) the term `Write Your Own Program' means the program 
        under which the Federal Emergency Management Agency enters into 
        a standard arrangement with private property insurance 
        companies to sell contracts for flood insurance coverage under 
        this title under their own business lines of insurance, and to 
        adjust and pay claims arising under such contracts; and
          ``(17) the term `Write Your Own company' means a private 
        property insurance company that participates in the Write Your 
        Own Program.''.
  (b) Biggert-Waters Flood Insurance Reform Act of 2012.--Subsection 
(a) of section 100202 of the Biggert-Waters Flood Insurance Reform Act 
of 2012 (42 U.S.C. 4004(a)) is amended by striking paragraph (5) and 
inserting the following new paragraph:
          ``(5) Write your own.--The terms `Write Your Own Program' and 
        `Write Your Own company' have the meanings given such terms in 
        section 1370(a) of the National Flood Insurance Act of 1968 (42 
        U.S.C. 4121(a)).''.

                          Purpose and Summary

    H.R. 3111, The National Flood Insurance Program 
Administrative Reform Act of 2019, makes numerous improvements 
to the administration of claims arising out of the Program, 
drawing on the lessons learned from Superstorm Sandy. H.R. 3111 
ensures that policyholders better understand the terms of their 
flood insurance policies, improves the appeals and litigation 
process, and prohibits and penalizes fraud and fraudulent 
statements in the claims process, among other reforms.

                  Background and Need for Legislation

    In late October 2012, Superstorm Sandy made landfall in the 
United States, resulting in more than 144,000 National Flood 
Insurance Program (NFIP) policyholders submitting notices of 
flood loss. The NFIP paid out more than $8.4 billion in flood 
claims with an average paid loss of $64,331.\1\ Multiple issues 
with the claims handling process arose in the handling of these 
claims, which the H.R. 3111 seeks to address.
---------------------------------------------------------------------------
    \1\Testimony of Roy Wright, Housing and Insurance Subcommittee, 
Committee on Financial Services, Flood Insurance Reform: FEMA's 
Perspective. Thursday, March 9, 2017.
---------------------------------------------------------------------------
    First, some Sandy victims were unfairly denied policy 
proceeds based on ``pre-existing conditions'' of the structure, 
or in some cases, ``earth movement''. In response, the H.R. 
3111 would create a 5-year pilot program to voluntarily inspect 
pre-existing structural conditions of insured and pre-insured 
properties and report to Congress within three years. The H.R. 
3111 would also require a GAO study on flood insurance coverage 
treatment of earth movement.
    Second, many Sandy victims dissatisfied with their claim 
amount filed an administrative appeal with the Federal 
Emergency Management Agency (FEMA) or a lawsuit in U.S. 
District Court but ran into issues with these appeals 
processes. For example, a March 2016 DHS IG report found that 
FEMA's appeals process offered little opportunity for the 
policyholder to explain their grievances.\2\ The report 
explains that FEMA would essentially either agree with the 
write-your-own (WYO) company\3\ on the denial of the claim, or 
return the claim to the company that originally denied it for 
reevaluation. The report also found that there is little 
incentive for the WYO companies to minimize litigation costs 
because FEMA ultimately covers the cost of any litigation 
expenses that arise within the scope of FEMA's relationship 
with the WYO. The H.R. 3111 would make a number of changes in 
response to these issues including: (1) Codifying an enhanced 
policyholder appeals process established by FEMA for 
individuals appealing a full or partial denial of their claim; 
(2) requiring the Administrator to make final determinations of 
claims within 120 days of filing; (3) requiring the 
Administrator to monitor and oversee litigation conducted by 
the WYOs to ensure that expenses are reasonable, appropriate, 
and cost-effective, and that WYOs comply with guidance and 
procedures related to litigation; (4) prohibiting the hiring of 
disbarred attorneys; and (5) requiring a GAO study on claims 
adjustment practices.
---------------------------------------------------------------------------
    \2\Office of the Inspector General Report entitled, ``FEMA Does Not 
Provide Adequate Oversight of Its National Flood Insurance Write Your 
Own Program, March 2016, available at https://www.oig.dhs.gov/assets/
Mgmt/2016/OIG0916-47-Mar16.pdf
    \3\WYO companies are insurance companies that contract with FEMA to 
administer NFIP policies.
---------------------------------------------------------------------------
    Third, in the aftermath of Sandy, there were multiple 
allegations of engineering reports that were fraudulently 
altered to deny certain payments without any explanation to the 
policyholder. One high profile instance of this is Raimey v. 
Wright National Flood Insurance Company in which the Court 
found that this case ``exposed reprehensible gamesmanship by a 
professional engineering company that unjustly frustrated 
efforts by two homeowners to get fair consideration of their 
claims.''\4\ The In response, the H.R. 3111 would prohibit 
false or fraudulent statements in connection with the 
preparation, production, or submission of claims adjustment or 
engineering reports.
---------------------------------------------------------------------------
    \4\In re Hurricane Sandy Cases (Raimey v. Wright National Flood 
Insurance Co.) (E.D.N.Y. November 7, 2014).
---------------------------------------------------------------------------
    The H.R. 3111 also seeks to ensure that policyholders 
better understand the terms of their flood insurance policies 
by: (1) requiring the Administrator to create a coverage 
disclosure sheet for policyholders detailing the coverage 
offered and other terms; (2) requiring sufficient staffing for 
the Office of the Flood Insurance Advocate; and (3) creating a 
new Technical Insurance Advisory Council consisting of federal, 
state, and local experts to review the NFIP's insurance 
practices and propose new standards to FEMA.
    Finally, the H.R. 3111 would require the updating and 
publication of interagency guidance to assist with lender 
compliance.

                      Section-by-Section Analysis


Section 1. Short title

    This section provides that the Act may be cited as the 
``National Flood Insurance Program Administrative Reform Act of 
2019''.

Sec. 2. Pilot program for properties with pre-existing conditions

    This section amends section 1311 of the National Flood 
Insurance Act of 1968 by adding a new subsection (c), which 
authorizes the creation of a pilot program to inspect pre-
existing structural conditions of insured and pre-insured 
properties and report to Congress no later than December 31, 
2023 prior to the pilot sunset on December 31, 2024.

Sec. 3. Penalties for fraud and false statements

    This section amends the National Flood Insurance Act of 
1968 by adding a new section 1349, which prohibits false or 
fraudulent statements in connection with the preparation, 
production, or submission of claims adjustment or engineering 
reports and allows the Administrator to set penalties for such 
statements.

Sec. 4. Enhanced policyholder appeals process

    This section amends the National Flood Insurance Act of 
1968 by adding a new section 1350, which codifies the due 
process protections established after Superstorm Sandy by FEMA 
for individuals appealing a full or partial denial of their 
claim.

Sec. 5. Deadline for approval of claims

    This section amends section 1312 of the National Flood 
Insurance Act of 1968 by adding a new subsection (d), which 
requires the FEMA Administrator to make an initial 
determination regarding the approval of a claim for payment or 
disapproval of the claim within 120 days of the claim being 
made. The Administrator may extend the deadline by an 
additional 30 days when extraordinary circumstances warrant 
more time.

Sec. 6. Litigation process oversight and reform

    This section amends the National Flood Insurance Act of 
1968 by adding a new section 1351, which provides the FEMA 
Administrator with authority and responsibility for overseeing 
litigation conducted by WYOs and requires that WYO litigation 
expenses are reasonable, appropriate, and cost effective, and 
provides the FEMA Administrator with the authority to deny any 
expenses that are contrary to those terms.

Sec. 7. Prohibition on hiring disbarred attorneys

    This section amends the National Flood Insurance Act of 
1968 by adding a new section 1352, which clarifies that the 
FEMA Administrator is prohibited from hiring any attorney who 
has been suspended or disbarred.

Sec. 8. Technical assistance reports

    This section further amends section 1312 of the National 
Flood Insurance Act of 1968 by adding a new subsection (e) and 
also adds a new section 1312A to Act, which together require 
the FEMA Administrator to restrict the use of outside technical 
reports by WYOs and the NFIP direct servicing agent as part of 
NFIP claims investigations only to such reports that are final 
and are prepared in compliance with applicable state and 
federal laws on licensure and conduct.

Sec. 9. Improved disclosure requirement for standard flood insurance 
        policies

    This section amends section 100234 of the Biggert-Waters 
Flood Insurance Reform Act of 2012 by adding new subsections 
(c) and (d), which require the FEMA Administrator to create a 
coverage disclosure sheet for policyholders detailing the 
coverage offered, type of loss covered, costs associated with 
the policy, clear communication of full flood risk and require 
the disclosure to include an acknowledgment of the disclosure 
by the policyholder and the insurer selling the policy.

Sec. 10. Reserve Fund amounts

    This section amends section 1310 of the National Flood 
Insurance Act of 1968 by adding a new subsection (g), which 
authorizes FEMA to transfer money from the Reserve Fund for the 
purpose of paying future claims.

Sec. 11. Sufficient staffing for office of flood insurance advocate

    This section amends section 24 of the Homewoner Flood 
Insurance Affordability Act of 2014 by adding a new subsection 
(e), which requires the FEMA Administrator to ensure the Office 
of the Flood Insurance Advocate has sufficient staffing within 
180 days after enactment.

Sec. 12. Federal Flood Insurance Advisory Committee

    This section amends section 1318 of the National Flood 
Insurance Act of 1968, providing a substitute text which 
creates a new Technical Insurance Advisory Council consisting 
of federal, state, and local experts to review the NFIP's 
insurance practices and propose new standards to FEMA.

Sec. 13. Interagency guidance on compliance

    This section requires that twelve months after enactment 
and every two years thereaftore that federal banking agencies 
update the document entitled, ``Interagency Questions and 
Answers Regarding Flood Insurance,'' which addresses many flood 
insurance compliance questions in order to understand any 
conflcits with FEMA requirements or other industry practices 
and limitations.

Sec. 14. GAO study of claims adjustment practices

    This section requires a GAO study assessing the policies 
and practices for adjustment of claims losses under the NFIP to 
determine whether the current system impacts the quality of the 
claims and adversely impacts policyholders.

Sec. 15. GAO study of flood insurance coverage treatment of earth 
        movement

    This section requires the GAO to study the treatment of 
``earth movement and subsidence caused by flooding'' on the 
NFIP and policyholders.

Sec. 16. Definitions

    This section adds certain definitions to the National Flood 
Insurance Act of 1968 and the Biggert-Waters Flood Insurance 
Reform Act of 2012.

                                Hearings

    For the purposes of section 103(i) of H. Res. 6 for the 
116th Congress, the Committee on Financial Services held a 
hearing to consider H.R. 3111 entitled ``Preparing for the 
Storm: Reauthorization of the National Flood Insurance 
Program'' on March 13, 2019. Testifying before the Committee 
was Maria Cox Lamm, South Carolina Department of Natural 
Resources, on behalf of the Association of State Flood Plain 
Managers; Christopher Heidrick, Heidrick & Company Insurance 
and Risk Management Services, LLC, on behalf of the Independent 
Insurance Agents and Brokers of America; Velma Smith, Senior 
Officer, The Pew Charitable Trusts; Mabel Guzman, Broker, 
@properties, on behalf of the National Association of Realtors; 
Collin O'Mara, President and CEO, National Wildlife Federation, 
on behalf of the SmarterSafer Coalition; Raymond J. Lehmann, 
Director of Finance, Insurance and Trade Policy, R Street 
Institute. A number of members of the House of Representatives 
also testified, including The Honorable Sean P. Duffy, Member 
of Congress; The Honorable Garret Graves, Member of Congress; 
The Honorable Blaine Luetkemeyer, Member of Congress; The 
Honorable Frank Pallone, Member of Congress; The Honorable Bill 
Pascrell, Member of Congress; and The Honorable Steve Scalise, 
Member of Congress.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
June 12, and ordered H.R. 3111 to be reported favorably to the 
House with an amendment in the nature of a substitute by a vote 
of 58 yeas and 0 nays, a quorum being present.

                  Committee Votes and Roll Call Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following roll call votes occurred during the Committee's 
consideration of H.R. 3111.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

             Statement of Performance Goals and Objectives

    Pursuant to clause (3)(c) of rule XIII of the Rules of the 
House of Representatives, the goals of H.R. 3111 are to ensure 
that the administration of claims under the National Flood 
Insurance Program are improved.

               New Budget Authority and CBO Cost Estimate

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974, and pursuant to clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following estimate for 
H.R. 3111 from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 18, 2019.
Hon. Maxine Waters,
Chairwoman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Madam Chairwoman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3111, the National 
Flood Insurance Program Administrative Reform Act of 2019.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jon Sperl.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    H.R. 3111 would direct the Federal Emergency Management 
Agency (FEMA) to make several administrative changes to the 
National Flood Insurance Program (NFIP) related to 
determinations for paying claims, processing timelines, and 
other matters. The costs of administering the NFIP are covered 
by annual appropriations. The premiums that property owners pay 
for flood insurance and payments for claims are classified as 
direct spending.
    Assuming appropriation of the necessary amounts, CBO 
estimates that implementing H.R. 3111 would cost $16 million 
over the 2020-2024 period, mostly to cover the costs of 
processing appeals of denied claims and an advisory committee 
on flood insurance. The costs of the legislation (detailed in 
Table 1) fall within budget function 450 (community and 
regional development).

               TABLE 1.--ESTIMATED INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 3111
----------------------------------------------------------------------------------------------------------------
                                                          By fiscal year, millions of dollars--
                                        ------------------------------------------------------------------------
                                           2019      2020      2021      2022      2023      2024     2019-2024
----------------------------------------------------------------------------------------------------------------
Estimated Authorization................         0         4         3         3         3         3           16
Estimated Outlays......................         0         4         3         3         3         3           16
----------------------------------------------------------------------------------------------------------------

    H.R. 3111 would change the process for policyholders to 
appeal claims that have been denied. Under current law, 
policyholders with a denied claim who subsequently file suit 
against their insurance carrier cannot appeal the denial of 
that claim.\1\H.R. 3111 would require policyholders to 
administratively appeal denied claims before filing suit 
against their carrier or FEMA, and would pause the one-year 
statute of limitations on filing suit while FEMA considers an 
administrative appeal. The bill also would require FEMA to 
issue a decision within 120 days of the policy holder filing an 
appeal. Consequently, CBO expects that the number of appeals 
filed would increase significantly and that FEMA's appeals 
branch would require additional resources to process that 
higher number of appeals in a timely manner. Using information 
from FEMA about the number of appeals filed under current law, 
CBO estimates that the cost to handle the increased number of 
appeals would be $2 million a year over the 2020-2024 period. 
Those costs would be for an additional nine employees and for 
contract support.
---------------------------------------------------------------------------
    \1\Under the NFIP, Private insurance companies issue and service 
most policies purchased by policyholders and receive a fee from the 
FEMA for administering those services. The NFIP covers the actuarial 
risk of paying claims.
---------------------------------------------------------------------------
    H.R. 3111 also would establish a flood insurance advisory 
committee, to include members from the federal government and 
the private sector. The committee would be responsible for 
reviewing and making recommendations on several different 
aspects of the NFIP. Using information from FEMA about the 
costs of operating a similar committee, CBO estimates that 
implementing this provision would cost about $1 million per 
year over the 2020-2024 period for staff, consultants, travel, 
and other expenses.
    The bill would direct the Government Accountability Office 
to complete two studies on the NFIP. Based on the cost of 
similar studies, CBO estimates that those studies would cost $1 
million in 2020.
    Finally, H.R. 3111 would authorize FEMA to create a pilot 
program through the end of 2024 that would allow private 
insurance companies who partner with FEMA to sell and service 
NFIP policies (known in the program as Write Your Own, or WYO, 
insurance companies) to inspect properties with NFIP insurance 
for pre-existing structural conditions that could result in the 
denial of an NFIP claim and to provide that information to the 
property owner and FEMA.
    FEMA would impose a surcharge on each policy to account for 
any administrative costs faced by the WYO companies to complete 
those inspections. Thus, the net effect on direct spending 
would be negligible because any additional costs associated 
with completing those inspections would be offset by additional 
NFIP collections.
    The CBO staff contact for this estimate is Jon Sperl. The 
estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 3111. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when the committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act (as amended by Section 101(a)(2) of the 
Unfunded Mandates Reform Act, Pub. L. 104-4), the Committee 
adopts as its own the estimate of federal mandates regarding 
H.R. 3111, as amended, prepared by the Director of the 
Congressional Budget Office.

                           Advisory Committee

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

              Application of Law to the Legislative Branch

    Pursuant to section 102(b)(3) of the Congressional 
Accountability Act, Pub. L. No. 104-1, H.R. 3111, as amended, 
does not apply to terms and conditions of employment or to 
access to public services or accommodations within the 
legislative branch.

                           Earmark Statement

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 3111 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as described in clauses 9(e), 9(f), and 9(g) of rule 
XXI.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of H.R. 3111 establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                        Changes to Existing Law

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, H.R. 3111, as reported, are shown as follows:

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                  NATIONAL FLOOD INSURANCE ACT OF 1968




           *       *       *       *       *       *       *
TITLE XIII--NATIONAL FLOOD INSURANCE

           *       *       *       *       *       *       *



CHAPTER I--THE NATIONAL FLOOD INSURANCE PROGRAM

           *       *       *       *       *       *       *



                     national flood insurance fund

    Sec. 1310. (a) To carry out the flood insurance program 
authorized by this title, the Administrator shall establish in 
the Treasury of the United States a National Flood Insurance 
Fund (hereinafter referred to as the ``fund'') which shall be 
an account separate from any other accounts or funds available 
to the Administrator and shall be available as described in 
subsection (f), without fiscal year limitation (except as 
otherwise provided in this section)--
            (1) for making such payments as may, from time to 
        time, be required under section 1334;
            (2) to pay reinsurance claims under the excess loss 
        reinsurance coverage provided under section 1335;
            (3) to repay to the Secretary of the Treasury such 
        sums as may be borrowed from him (together with 
        interest) in accordance with the authority provided in 
        section 1309;
            (4) to the extent approved in appropriations Acts, 
        to pay any administrative expenses of the flood 
        insurance and floodplain management programs (including 
        the costs of mapping activities under section 1360);
            (5) for the purposes specified in subsection (d) 
        under the conditions provided therein;
            (6) for carrying out the program under section 
        1315(b);
            (7) for transfers to the National Flood Mitigation 
        Fund, but only to the extent provided in section 
        1367(b)(1); and
            (8) for carrying out section 1363(f).
    (b) The fund shall be credited with--
            (1) such funds borrowed in accordance with the 
        authority provided in section 1309 as may from time to 
        time be deposited in the fund;
            (2) premiums, fees, or other charges which may be 
        paid or collected in connection with the excess loss 
        reinsurance coverage provided under section 1335;
            (3) such amounts as may be advanced to the fund 
        from appropriations in order to maintain the fund in an 
        operative condition adequate to meet its liabilities;
            (4) interest which may be earned on investments of 
        the fund pursuant to subsection (c);
            (5) such sums as are required to be paid to the 
        Administrator under section 1308(d); and
            (6) receipts from any other operations under this 
        title (including premiums under the conditions 
        specified in subsection (d), and salvage proceeds, if 
        any, resulting from reinsurance coverage).
    (c) If, after--
            (1) all outstanding obligations of the fund have 
        been liquidated, and
            (2) any outstanding amounts which may have been 
        advanced to the fund from appropriations authorized 
        under section 1376(a)(2)(B) have been credited to the 
        appropriation from which advanced, with interest 
        accrued at the rate, prescribed under section 15(e) of 
        the Federal Flood Insurance Act of 1956, as in effect 
        immediately prior to the enactment of this title,
the Administrator determines that the moneys of the fund are in 
excess of current needs, he may request the investment of such 
amounts as he deems advisable by the Secretary of the Treasury 
in obligations issued or guaranteed by the United States.
    (d) In the event the Administrator makes a determination in 
accordance with the provisions of section 1340 that operation 
of the flood insurance program, in whole or in part, should be 
carried out through the facilities of the Federal Government, 
the fund shall be available for all purposes incident thereto, 
including--
            (1) cost incurred in the adjustment and payment of 
        any claims for losses, and
            (2) payment of applicable operating costs set forth 
        in the schedules prescribed under section 1311,
for so long as the program is so carried out, and in such event 
any premiums paid shall be deposited by the Administrator to 
the credit of the fund.
    (e) An annual business-type budget for the fund shall be 
prepared, transmitted to the Congress, considered, and enacted 
in the manner prescribed by sections 9103 and 9104 of title 31, 
United States Code, for wholly-owned Government corporations.
    (f) The Fund shall be available, with respect to any fiscal 
year beginning on or after October 1, 1981, only to the extent 
approved in appropriation Acts; except that the fund shall be 
available for the purpose described in subsection (d)(1) 
without such approval.
    (g) Crediting of Reserve Fund Amounts.--Funds collected 
pursuant to section 1310A may be credited to the Fund under 
this section to be available for the purpose described in 
subsection (d)(1).

           *       *       *       *       *       *       *


                     operating costs and allowances

    Sec. 1311. (a) The Administrator shall from time to time 
negotiate with appropriate representatives of the insurance 
industry for the purpose of establishing--
            (1) a current schedule of operating costs 
        applicable both to risk-sharing insurance companies and 
        other insurers and to insurance companies and other 
        insurers, insurance agents and brokers, and insurance 
        adjustment organizations participating on other than a 
        risk-sharing basis, and
            (2) a current schedule of operating allowances 
        applicable to risk-sharing insurance companies and 
        other insurers,
which may be payable in accordance with the provisions of 
chapter II, and such schedules shall from time to time be 
prescribed in regulations.
    (b) For purposes of subsection (a)--
            (1) the term ``operating costs''' shall (without 
        limiting such term) include--
                    (A) expense reimbursements covering the 
                direct, actual and necessary expenses incurred 
                in connection with selling and servicing flood 
                insurance coverage;
                    (B) reasonable compensation payable for 
                selling and servicing flood insurance coverage, 
                or commissions or service fees paid to 
                producers;
                    (C) loss adjustment expenses; and
                    (D) other direct, actual, and necessary 
                expenses which the Administrator finds are 
                incurred in connection with selling or 
                servicing flood insurance coverage; and
            (2) the term ``operating allowances''' shall 
        (without limiting such term) include amounts for profit 
        and contingencies which the Administrator finds 
        reasonable and necessary to carry out the purposes of 
        this title.
    (c) Pilot Program for Investigation of Preexisting 
Structural Conditions.--
            (1) Voluntary program.--The Administrator shall 
        carry out a pilot program under this subsection to 
        provide for companies participating in the Write Your 
        Own program (as such term is defined in section 1370(a) 
        (42 U.S.C. 4121(a))) to investigate preexisting 
        structural conditions of insured properties and 
        potentially insured properties that could result in the 
        denial of a claim under a policy for flood insurance 
        coverage under this title in the event of a flood loss 
        to such property. Participation in the pilot program 
        shall be voluntary on the part of Write Your Own 
        companies.
            (2) Investigation of properties.--Under the pilot 
        program under this subsection, a Write Your Own company 
        participating in the program shall--
                    (A) provide in policies for flood insurance 
                coverage under this title covered by the 
                program that, upon the request of the 
                policyholder, the company shall provide for--
                            (i) an investigation of the 
                        property covered by such policy, using 
                        common methods, to determine whether 
                        preexisting structural conditions are 
                        present that could result in the denial 
                        of a claim under such policy for flood 
                        losses; and
                            (ii) if such investigation is not 
                        determinative, an on-site inspection of 
                        the property to determine whether such 
                        preexisting structural conditions are 
                        present;
                    (B) upon completion of an investigation or 
                inspection pursuant to subparagraph (A) that 
                determines that such a preexisting structural 
                condition is present or absent, submit a report 
                to the policyholder and Administrator 
                describing the condition; and
                    (C) impose a surcharge on each policy 
                described in subparagraph (A) in such amount 
                that the Administrator determines is 
                appropriate to cover the costs of 
                investigations and inspections performed 
                pursuant to such policies and reimburse Write 
                Your Own companies participating in the program 
                under this subsection for such costs.
            (3) Interim report.--Not later than December 31, 
        2023, the Administrator shall submit a report to the 
        Committee on Financial Services of the House of 
        Representatives and the Committee on Banking, Housing, 
        and Urban Affairs of the Senate describing the 
        operation of the pilot program to that date.
            (4) Sunset.--The Administrator may not provide any 
        policy for flood insurance described in paragraph 
        (2)(A) after December 31, 2024.
            (5) Final report.--Not later than March 31, 2025, 
        the Administrator shall submit a final report regarding 
        the pilot program under this section to the Committee 
        on Financial Services of the House of Representatives 
        and the Committee on Banking, Housing, and Urban 
        Affairs of the Senate. The report shall include any 
        findings and recommendations of the Administrator 
        regarding the pilot program.

                           payment of claims

    Sec. 1312. (a) In General.--[The Administrator] Subject to 
other provisions of this section, the Administrator is 
authorized to prescribe regulations establishing the general 
method or methods by which proved and approved claims for 
losses may be adjusted and paid for any damage to or loss of 
property which is covered by flood insurance made available 
under the provisions of this title.
    (b) Minimum Annual Deductible.--
            (1) Pre-firm properties.--For any structure which 
        is covered by flood insurance under this title, and on 
        which construction or substantial improvement occurred 
        on or before December 31, 1974, or before the effective 
        date of an initial flood insurance rate map published 
        by the Administrator under section 1360 for the area in 
        which such structure is located, the minimum annual 
        deductible for damage to such structure shall be--
                    (A) $1,500, if the flood insurance coverage 
                for such structure covers loss of, or physical 
                damage to, such structure in an amount equal to 
                or less than $100,000; and
                    (B) $2,000, if the flood insurance coverage 
                for such structure covers loss of, or physical 
                damage to, such structure in an amount greater 
                than $100,000.
            (2) Post-firm properties.--For any structure which 
        is covered by flood insurance under this title, and on 
        which construction or substantial improvement occurred 
        after December 31, 1974, or after the effective date of 
        an initial flood insurance rate map published by the 
        Administrator under section 1360 for the area in which 
        such structure is located, the minimum annual 
        deductible for damage to such structure shall be--
                    (A) $1,000, if the flood insurance coverage 
                for such structure covers loss of, or physical 
                damage to, such structure in an amount equal to 
                or less than $100,000; and
                    (B) $1,250, if the flood insurance coverage 
                for such structure covers loss of, or physical 
                damage to, such structure in an amount greater 
                than $100,000.
    (c) Payment of Claims to Condominium Owners.--The 
Administrator may not deny payment for any damage to or loss of 
property which is covered by flood insurance to condominium 
owners who purchased such flood insurance separate and apart 
from the flood insurance purchased by the condominium 
association in which such owner is a member, based solely, or 
in any part, on the flood insurance coverage of the condominium 
association or others on the overall property owned by the 
condominium association.
    (d) Deadline for Approval of Claims.--
            (1) In general.--The Administrator shall provide 
        that, in the case of any claim for damage to or loss of 
        property under flood insurance coverage made available 
        under this title, an initial determination regarding 
        approval of a claim for payment or disapproval of the 
        claim be made, and notification of such determination 
        be provided to the insured making such claim, not later 
        than the expiration of the 120-day period (as such 
        period may be extended pursuant to paragraph (2)) 
        beginning upon the day on which the policyholder 
        submits a signed proof of loss detailing the damage and 
        amount of the loss. Payment of approved claims shall be 
        made as soon as possible after such approval.
            (2) Extension of deadline.--The Administrator 
        shall--
                    (A) provide that the period referred to in 
                paragraph (1) may be extended by additional 
                successive periods of 30 days in cases where 
                extraordinary circumstances are demonstrated; 
                and
                    (B) establish, by regulation, criteria for 
                demonstrating such extraordinary circumstances.
    (e) Use of Technical Assistance Reports.--When adjusting 
claims for any damage to or loss of property which is covered 
by flood insurance made available under this title, the 
Administrator may rely upon technical assistance reports, as 
such term is defined in section 1312A, only if such reports are 
final and are prepared in compliance with applicable State and 
Federal laws regarding professional licensure and conduct.

SEC. 1312A. DISCLOSURE OF TECHNICAL ASSISTANCE REPORTS.

    (a) In General.--Notwithstanding section 552a of title 5, 
United States Code, upon request by a policyholder, the 
Administrator shall provide a true, complete, and unredacted 
copy of any technical assistance report that the Administrator 
relied upon in adjusting and paying for any damage to or loss 
of property insured by the policyholder and covered by flood 
insurance made available under this title. Such disclosures 
shall be in addition to any other right of disclosure otherwise 
made available pursuant such section 552a or any other 
provision of law.
    (b) Direct Disclosure by Write Your Own Companies and 
Direct Servicing Agents.--A Write Your Own company or direct 
servicing agent in possession of a technical assistance report 
subject to disclosure under subsection (a) may disclose such 
technical assistance report without further review or approval 
by the Administrator.
    (c) Definitions.--For purposes of this section, the 
following definitions shall apply:
            (1) Policyholder.--The term ``policyholder'' means 
        a person or persons shown as an insured on the 
        declarations page of a policy for flood insurance 
        coverage sold pursuant to this title.
            (2) Technical assistance report.--The term 
        ``technical assistance report'' means a report created 
        for the purpose of furnishing technical assistance to 
        an insurance claims adjuster assigned by the National 
        Flood Insurance Program, including by engineers, 
        surveyors, salvors, architects, and certified public 
        accounts.

           *       *       *       *       *       *       *


                          [advisory committee

    [Sec. 1318. (a) The Administrator shall appoint a flood 
insurance advisory committee without regard to the provisions 
of title 5, United States Code, governing appointments in the 
competitive service, and such committee shall advise the 
Administrator in the preparation of any regulations prescribed 
in accordance with this title and with respect to policy 
matters arising in the administration of this title, and shall 
perform such other responsibilities as the Administrator may, 
from time to time, assign to such committee.
    [(b) Such committee shall consist of not more than fifteen 
persons and such persons shall be selected from among 
representatives of--
            [(1) the insurance industry,
            [(2) State and local governments,
            [(3) lending institutions,
            [(4) the homebuilding industry, and
            [(5) the general public.
    [(c) Members of the committee shall, while attending 
conferences or meetings thereof, be entitled to receive 
compensation at a rate fixed by the Administrator but not 
exceeding $100 per day, including traveltime, and while so 
serving away from their homes or regular places of business 
they may be allowed travel expenses, including per diem in lieu 
of subsistence, as is authorized under section 5703 of title 5, 
United States Code, for persons in the Government service 
employed intermittently.]

SEC. 1318. FEDERAL FLOOD INSURANCE ADVISORY COMMITTEE.

    (a) Establishment.--There is established an advisory 
committee to be known as the Federal Flood Insurance Advisory 
Committee (in this section referred to as the ``Committee'').
    (b) Membership.--
            (1) Members.--The Committee shall consist of--
                    (A) the Administrator of the Federal 
                Emergency Management Agency (in this section 
                referred to as the ``Administrator''), or the 
                designee thereof; and
                    (B) additional members appointed by the 
                Administrator or the designee of the 
                Administrator, who shall include--
                            (i) three representatives of Write 
                        Your Own companies;
                            (ii) one individual who served in 
                        the past, or is currently serving, as 
                        an insurance regulator of a State, the 
                        District of Columbia, the Commonwealth 
                        of Puerto Rico, Guam, the Commonwealth 
                        of the Northern Mariana Islands, the 
                        Virgin Islands, American Samoa, or any 
                        federally-recognized Indian tribe;
                            (iii) one representative of the 
                        financial or insurance sectors who is 
                        involved in risk transfers, including 
                        reinsurance, resilience bonds, and 
                        other insurance-linked securities;
                            (iv) one actuary with demonstrated 
                        high-level knowledge of catastrophic 
                        risk insurance;
                            (v) two insurance agents or brokers 
                        with demonstrated experience with the 
                        sale of flood insurance under the 
                        National Flood Insurance Program, one 
                        of whom shall have demonstrated 
                        expertise in the challenges in insuring 
                        low-income communities;
                            (vi) one insurance claims 
                        specialist;
                            (vii) one representative of a 
                        recognized consumer advocacy 
                        organization; and
                            (viii) one representative from an 
                        academic institution who has 
                        demonstrated expertise in insurance.
            (2) Qualifications.--In appointing members under 
        paragraph (1)(C), the Administrator shall, to the 
        maximum extent practicable, ensure the membership of 
        the Committee has a balance of members reflecting 
        geographic diversity, including representation from 
        areas inland or with coastline identified by the 
        Administrator as at high risk for flooding or as areas 
        having special flood hazards.
    (c) Duties.--The Administrator shall submit, and the 
Committee shall review and make recommendations on, matters 
related to the insurance aspects of the National Flood 
Insurance Program, including ratemaking, technology to 
administer insurance, risk assessment, actuarial practices, 
claims practices, sales and insurance delivery, compensation 
and allowances, the public-private partnership under the Write 
Your Own arrangement, general best insurance practices, and any 
significant changes proposed to be made regarding the operation 
of the National Flood Insurance Program.
    (d) Chairperson.--The members of the Committee shall elect 
one member to serve as the chairperson of the Committee (in 
this section referred to as the ``Chairperson'').
    (e) Compensation.--Members of the Committee shall receive 
no additional compensation by reason of their service on the 
Committee. Members may be reimbursed by the Federal Government 
for travel expenses, including per diem in lieu of subsistence, 
at rates consistent with rates authorized for employees of 
Federal agencies under subchapter 1 of chapter 57 of title 5, 
United States Code, while away from home or regular places of 
business in performance of service for the Committee.
    (f) Meetings and Actions.--
            (1) In general.--The Committee shall meet not less 
        frequently than twice each year at the request of the 
        Chairperson or a majority of its members, and may take 
        action by a vote of the majority of the members in 
        accordance with the Committee's charter.
            (2) Initial meeting.--The Administrator, or a 
        person designated by the Administrator, shall request 
        and coordinate the initial meeting of the Committee.
    (g) Transparency; FACA.--To the greatest extent possible, 
the Committee shall operate in a transparent manner that 
adheres to the requirements of the Federal Advisory Committee 
Act, with the exception that the Committee shall be permitted 
to freely communicate both during and between meetings under 
paragraph (f) in a confidential manner to discuss non-public 
information regarding the operations of the National Flood 
Insurance Program and other sensitive and non-public issues. If 
such communication occurs, the Committee shall, to the greatest 
extent possible, report a summary of such discussions in an 
appropriate public manner.
    (h) Staff of FEMA.--Upon the request of the Chairperson, 
the Administrator may detail, on a nonreimbursable basis, 
personnel of the Federal Emergency Management Agency to assist 
the Committee in carrying out its duties.
    (i) Powers.--In carrying out this section, the Committee 
may hold hearings, receive evidence and assistance, provide 
information, and conduct research, as it considers appropriate.
    (j) Reports to Congress.--The Administrator, on an annual 
basis, shall report to the Committee on Financial Services of 
the House of Representatives, the Committee on Banking, 
Housing, and Urban Affairs of the Senate, and the Office of 
Management and Budget on--
            (1) the recommendations made by the Committee;
            (2) actions taken by the Federal Emergency 
        Management Agency to address such recommendations to 
        improve the insurance aspects of the national flood 
        insurance program; and
            (3) any recommendations made by the Committee that 
        have been deferred or not acted upon, together with an 
        explanatory statement.
    (k) Rule of Construction.--This section shall not be 
construed to eliminate or alter any requirement on the 
Administrator associated with the notification or consultation 
of specified individuals or groups of individuals as required 
elsewhere by statute.

           *       *       *       *       *       *       *


  CHAPTER II--ORGANIZATION AND ADMINISTRATION OF THE FLOOD INSURANCE 
PROGRAM

           *       *       *       *       *       *       *



Part B--Government Program With Industry Assistance

           *       *       *       *       *       *       *



          adjustment and payment of claims and judicial review

    Sec. 1341. In the event the program is carried out as 
provided in section 1340, the Administrator shall be authorized 
to adjust and make payment of any claims for proved and 
approved losses covered by flood insurance, and upon the 
disallowance by the Administrator of any such claims, or upon 
the refusal of the claimant to accept the amount allowed upon 
any such claim, the claimant, within one year after the date of 
mailing of notice of disallowance or partial disallowance by 
the Administrator, may institute an action against the 
Administrator on such claim in the United States district court 
for the district in which the insured property or the major 
part thereof shall have been situated, and original exclusive 
jurisdiction is hereby conferred upon such court to hear and 
determine such action without regard to the amount in 
controversy. For purposes of this section, the time from which 
the Administrator has acknowledged receipt of a request by the 
policyholder to pursue an appeal of the initial determination 
regarding approval, disapproval, or amount of payment by the 
Administrator until the Administrator mails a final 
determination of such appeal shall not be considered towards 
the one year statute of limitation under this Act. However, 
this section shall not be construed as creating any action or 
remedy not otherwise provided by this title.

           *       *       *       *       *       *       *


Part C--Provisions of General Applicability

           *       *       *       *       *       *       *



SEC. 1349. PENALTIES FOR FRAUD AND FALSE STATEMENTS IN THE NATIONAL 
                    FLOOD INSURANCE PROGRAM.

    (a) Prohibited Acts.--A person shall not knowingly make a 
false, fictitious, or fraudulent statement, production, or 
submission in connection with the proving or adjusting of a 
claim for flood insurance coverage made available under this 
Act. Such prohibited acts include--
            (1) knowingly forging an engineering report, claims 
        adjustment report or technical assistance report used 
        to support a claim determination;
            (2) knowingly making any materially false, 
        fictitious, or fraudulent statement or representation 
        in an engineering report, claims adjustment report, or 
        technical assistance report to support a claim 
        determination that results in a wrongful denial or 
        substantial payment error of flood insurance coverage; 
        and
            (3) knowingly submitting a materially false, 
        fictitious, or fraudulent claim that results in 
        wrongful payment of flood insurance coverage.
    (b) Definition.--For purposes of this section, the term 
``knowingly'' means having actual awareness of the prohibitions 
under this part and acting deliberately in violation of such 
prohibitions.
    (c) Administrative Remedy.--Prior to any legal action being 
taken related to this section, all administrative remedies 
shall be exhausted.
    (d) Rule of Construction.--This section shall not be 
construed--
            (1) to prevent the Federal Government from bringing 
        action against a company or individual under applicable 
        statutes, including the False Claims Act; and
            (2) as creating any action, private right of 
        action, or remedy not otherwise provided by this title 
        or under Federal law.
    (e) State action.--Any person found to have violated 
subsection (a) shall be referred to the appropriate and 
relevant State licensing agency by the Attorney General.

SEC. 1350. APPROVAL OF DECISIONS RELATING TO FLOOD INSURANCE COVERAGE.

    (a) In General.--The Administrator shall establish an 
appeals process to enable holders of a flood insurance policy 
provided under this title to appeal decisions, with respect to 
the disallowance, in whole or in part, of any claims for losses 
covered by flood insurance. Such appeals shall be limited to 
the claim or portion of the claim disallowed.
    (b) Appeal Decision.--Upon a decision in an appeal under 
subsection (a), the Administrator shall provide the 
policyholder with a written appeal decision. The appeal 
decision shall explain the Administrator's determination to 
uphold, modify, or overturn the decision. The Administrator may 
direct the Write Your Own company to take action necessary to 
resolve the appeal, to include re-inspection, re-adjustment, or 
payment, as appropriate.
    (c) Deadline for Appeals Decision.-- The Administrator 
shall issue an appeals decision pursuant to subsection (b) not 
later than the expiration of the 120-day period beginning upon 
the day on which the Administrator acknowledges receipt of a 
request by the policyholder to pursue an appeal of the initial 
determination regarding approval, disapproval, or amount of 
payment by the Administrator. In cases where extraordinary 
circumstances, as established by regulation, are demonstrated, 
the 120-day period may be extended by additional successive 
periods of 30 days.
    (d) Administrative Remedy.--A policyholder shall exhaust 
all administrative remedies, including submission of disputed 
claims to appeal under subsection (a), prior to commencing 
legal action on a disputed claim.
    (e) Rules of Construction.--This section shall not be 
construed as--
            (1) making the Federal Emergency Management Agency 
        or the Administrator a party to the flood insurance 
        contract; or
            (2) creating any action or remedy not otherwise 
        provided by this title.
    (f) Policyholder Litigation.--This section shall not be 
construed to prevent a policyholder from bringing legal action 
against the Federal Emergency Management Agency or a Write Your 
Own company following the exhaustion of all administrative 
remedies and pursuant to applicable statute.

SEC. 1351. OVERSIGHT OF LITIGATION.

    (a) Oversight.--The Administrator shall monitor and oversee 
litigation conducted by Write Your Own companies arising under 
contracts for flood insurance sold pursuant to this title, to 
ensure that--
            (1) litigation expenses are reasonable, 
        appropriate, and cost-effective; and
            (2) Write Your Own companies comply with guidance 
        and procedures established by the Administrator 
        regarding the conduct of litigation.
    (b) Denial of Reimbursement for Expenses.--The 
Administrator may deny reimbursement for litigation expenses 
that are determined to be unreasonable, excessive, contrary to 
guidance issued by the Administrator, or outside the scope of 
any arrangement entered into with a Write Your Own company.
    (c) Joint Defense.--
            (1) Authority.--The Administrator and the Write 
        Your Own companies may enter into, and operate under, a 
        joint defense agreement for any claim or lawsuit, or 
        multiple claims or lawsuits, arising under a contract 
        of flood insurance.
            (2) Free flow of information.--Under such joint 
        defense agreement, there may be the free flow of 
        information between the Write Your Own companies, the 
        Administrator, the United States Department of Justice, 
        and legal counsel for the Write Your Own companies for 
        the purpose of litigation coordination and to allow the 
        Administrator to perform oversight responsibility of 
        such litigation.
            (3) Arrangement.-- Such joint defense agreement may 
        be included in the Arrangement between the 
        Administrator and the Write Your Own companies.
            (4) Regulations.--The Administrator may issue rules 
        or regulations or provide such formal guidance as the 
        Administrator considers necessary and appropriate in 
        order to further such joint defense agreement with the 
        Write Your Own companies.

SEC. 1352. PROHIBITION ON HIRING DISBARRED ATTORNEYS.

    The Administrator may not at any time newly employ in 
connection with the flood insurance program under this title 
any attorney who has been suspended or disbarred by any court, 
bar, or Federal or State agency to which the individual was 
previously admitted to practice.

           *       *       *       *       *       *       *


        CHAPTER IV--APPROPRIATIONS AND MISCELLANEOUS PROVISIONS


                              definitions

    Sec. 1370. (a) As used in this title--
            (1) the term ``flood'' shall have such meaning as 
        may be prescribed in regulations of the Administrator, 
        and may include inundation from rising waters or from 
        the overflow of streams, rivers, or other bodies of 
        water, or from tidal surges, abnormally high tidal 
        water, tidal waves, tsunamis, hurricanes, or other 
        severe storms or deluge;
            (2) the terms ``United States''' (when used in a 
        geographic sense) and ``State'' includes the several 
        States, the District of Columbia, the territories and 
        possessions, the Commonwealth of Puerto Rico, and the 
        Trust Territory of the Pacific Islands;
            (3) the terms ``insurance company'', ``other 
        insurer'' and ``insurance agent or broker'' include any 
        organization or person that is authorized to engage in 
        the business of insurance under the laws of any State, 
        subject to the reporting requirements of the Securities 
        Exchange Act of 1934 pursuant to section 13(a) or 15(d) 
        of such Act (15 U.S.C. 78m(a) and 78o(d)), or 
        authorized by the Administrator to assume reinsurance 
        on risks insured by the flood insurance program;
            (4) the term ``insurance adjustment organization'' 
        includes any organizations and persons engaged in the 
        business of adjusting loss claims arising under 
        insurance policies issued by any insurance company or 
        other insurer;
            (5) the term ``person'' includes any individual or 
        group of individuals, corporation, partnership, 
        association, or any other organized group of persons, 
        including State and local governments and agencies 
        thereof;
            (6) the term ``Administrator'' means the 
        Administrator of the Federal Emergency Management 
        Agency;
            (7) the term ``repetitive loss structure'' means a 
        structure covered by a contract for flood insurance 
        that--
                    (A) has incurred flood-related damage on 2 
                occasions, in which the cost of repair, on the 
                average, equaled or exceeded 25 percent of the 
                value of the structure at the time of each such 
                flood event; and
                    (B) at the time of the second incidence of 
                flood-related damage, the contract for flood 
                insurance contains increased cost of compliance 
                coverage.
            (8) the term ``Federal agency lender'' means a 
        Federal agency that makes direct loans secured by 
        improved real estate or a mobile home, to the extent 
        such agency acts in such capacity;
            (9) the term ``Federal entity for lending 
        regulation'' means the Board of Governors of the 
        Federal Reserve System, the Federal Deposit Insurance 
        Corporation, the Comptroller of the Currency, the 
        National Credit Union Administration, and the Farm 
        Credit Administration, and with respect to a particular 
        regulated lending institution means the entity 
        primarily responsible for the supervision of the 
        institution;
            (10) the term ``improved real estate'' means real 
        estate upon which a building is located;
            (11) the term ``lender'' means a regulated lending 
        institution or Federal agency lender;
            (12) the term ``natural and beneficial floodplain 
        functions''' means--
                    (A) the functions associated with the 
                natural or relatively undisturbed floodplain 
                that (i) moderate flooding, retain flood 
                waters, reduce erosion and sedimentation, and 
                mitigate the effect of waves and storm surge 
                from storms, and (ii) reduce flood related 
                damage; and
                    (B) ancillary beneficial functions, 
                including maintenance of water quality and 
                recharge of ground water, that reduce flood 
                related damage;
            (13) the term ``regulated lending institution'' 
        means any bank, savings and loan association, credit 
        union, farm credit bank, Federal land bank association, 
        production credit association, or similar institution 
        subject to the supervision of a Federal entity for 
        lending regulation;
            (14) the term ``servicer'' means the person 
        responsible for receiving any scheduled periodic 
        payments from a borrower pursuant to the terms of a 
        loan, including amounts for taxes, insurance premiums, 
        and other charges with respect to the property securing 
        the loan, and making the payments of principal and 
        interest and such other payments with respect to the 
        amounts received from the borrower as may be required 
        pursuant to the terms of the loan; [and]
            (15) the term ``substantially damaged structure'' 
        means a structure covered by a contract for flood 
        insurance that has incurred damage for which the cost 
        of repair exceeds an amount specified in any regulation 
        promulgated by the Administrator, or by a community 
        ordinance, whichever is lower[.];
            (16) the term ``Write Your Own Program'' means the 
        program under which the Federal Emergency Management 
        Agency enters into a standard arrangement with private 
        property insurance companies to sell contracts for 
        flood insurance coverage under this title under their 
        own business lines of insurance, and to adjust and pay 
        claims arising under such contracts; and
            (17) the term ``Write Your Own company'' means a 
        private property insurance company that participates in 
        the Write Your Own Program.
    (b) The term ``flood'' shall also include inundation from 
mudslides which are proximately caused by accumulations of 
water on or under the ground; and all of the provisions of this 
title shall apply with respect to such mudslides in the same 
manner and to the same extent as with respect to floods 
described in subsection (a)(1), subject to and in accordance 
with such regulations, modifying the provisions of this title 
(including the provisions relating to land management and use) 
to the extent necessary to insure that they can be effectively 
so applied, as the Administrator may prescribe to achieve (with 
respect to such mudslides) the purposes of this title and the 
objectives of the program.
    (c) The term ``flood'' shall also include the collapse or 
subsidence of land along the shore of a lake or other body of 
water as a result of erosion or undermining caused by waves or 
currents of water exceeding anticipated cyclical levels, and 
all of the provisions of this title shall apply with respect to 
such collapse or subsidence in the same manner and to the same 
extent as with respect to floods described in subsection 
(a)(1), subject to and in accordance with such regulations, 
modifying the provisions of this title (including the 
provisions relating to land management and use) to the extent 
necessary to insure that they can be effectively so applied, as 
the Administrator may prescribe to achieve (with respect to 
such collapse or subsidence) the purposes of this title and the 
objectives of the program.

           *       *       *       *       *       *       *

                              ----------                              


     BUNNING-BEREUTER-BLUMENAUER FLOOD INSURANCE REFORM ACT OF 2004




           *       *       *       *       *       *       *
TITLE II--MISCELLANEOUS PROVISIONS

           *       *       *       *       *       *       *


[SEC. 202. SUPPLEMENTAL FORMS.

    [(a) In General.--Not later than 6 months after the date of 
enactment of this Act, the Director shall develop supplemental 
forms to be issued in conjunction with the issuance of a flood 
insurance policy that set forth, in simple terms--
            [(1) the exact coverages being purchased by a 
        policyholder;
            [(2) any exclusions from coverage that apply to the 
        coverages purchased;
            [(3) an explanation, including illustrations, of 
        how lost items and damages will be valued under the 
        policy at the time of loss;
            [(4) the number and dollar value of claims filed 
        under a flood insurance policy over the life of the 
        property, and the effect, under the National Flood 
        Insurance Act of 1968 (42 U.S.C. 4001 et seq.), of the 
        filing of any further claims under a flood insurance 
        policy with respect to that property; and
            [(5) any other information that the Director 
        determines will be helpful to policyholders in 
        understanding flood insurance coverage.
    [(b) Distribution.--The forms developed under subsection 
(a) shall be given to--
            [(1) all holders of a flood insurance policy at the 
        time of purchase and renewal; and
            [(2) insurance companies and agents that are 
        authorized to sell flood insurance policies.

[SEC. 203. ACKNOWLEDGEMENT FORM.

    [(a) In General.--Not later than 6 months after the date of 
enactment of this Act, the Director shall develop an 
acknowledgement form to be signed by the purchaser of a flood 
insurance policy that contains--
            [(1) an acknowledgement that the purchaser has 
        received a copy of the standard flood insurance policy, 
        and any forms developed under section 202; and
            [(2) an acknowledgement that the purchaser has been 
        told that the contents of a property or dwelling are 
        not covered under the terms of the standard flood 
        insurance policy, and that the policyholder has the 
        option to purchase additional coverage for such 
        contents.
    [(b) Distribution.--Copies of an acknowledgement form 
executed under subsection (a) shall be made available to the 
purchaser and the Director.]

           *       *       *       *       *       *       *


[SEC. 205. APPEAL OF DECISIONS RELATING TO FLOOD INSURANCE COVERAGE

    [Not later than 6 months after the date of enactment of 
this Act, the Director shall, by regulation, establish an 
appeals process through which holders of a flood insurance 
policy may appeal the decisions, with respect to claims, proofs 
of loss, and loss estimates relating to such flood insurance 
policy, of--
            [(1) the use of cost of compliance coverage under 
        section 1304(b) of the National Flood Insurance Act of 
        1968 (42 U.S.C. 4011(b)) in connection with flood 
        insurance policies;
            [(2) any employee or contractor of the Federal 
        Emergency Management Agency.]

           *       *       *       *       *       *       *

                              ----------                              


           BIGGERT-WATERS FLOOD INSURANCE REFORM ACT OF 2012




           *       *       *       *       *       *       *
DIVISION F--MISCELLANEOUS

           *       *       *       *       *       *       *


                       TITLE II--FLOOD INSURANCE

Subtitle A--Flood Insurance Reform and Modernization

           *       *       *       *       *       *       *


SEC. 100202. DEFINITIONS.

    (a) In General.--In this subtitle, the following 
definitions shall apply:
            (1) 100-YEAR FLOODPLAIN.--The term ``100-year 
        floodplain'' means that area which is subject to 
        inundation from a flood having a 1-percent chance of 
        being equaled or exceeded in any given year.
            (2) 500-YEAR FLOODPLAIN.--The term ``500-year 
        floodplain'' means that area which is subject to 
        inundation from a flood having a 0.2-percent chance of 
        being equaled or exceeded in any given year.
            (3) Administrator.--The term ``Administrator'' 
        means the Administrator of the Federal Emergency 
        Management Agency.
            (4) National flood insurance program.--The term 
        ``National Flood Insurance Program'' means the program 
        established under the National Flood Insurance Act of 
        1968 (42 U.S.C. 4011 et seq.).
            [(5) Write your own.--The term ``Write Your Own'' 
        means the cooperative undertaking between the insurance 
        industry and the Federal Insurance Administration which 
        allows participating property and casualty insurance 
        companies to write and service standard flood insurance 
        policies.]
            (5) Write your own.--The terms ``Write Your Own 
        Program'' and ``Write Your Own company'' have the 
        meanings given such terms in section 1370(a) of the 
        National Flood Insurance Act of 1968 (42 U.S.C. 
        4121(a)).
    (b) Common Terminology.--Except as otherwise provided in 
this subtitle, any terms used in this subtitle shall have the 
meaning given to such terms under section 1370 of the National 
Flood Insurance Act of 1968 (42 U.S.C. 4121).

           *       *       *       *       *       *       *


SEC. 100234. POLICY DISCLOSURES.

    (a) In General.--Notwithstanding any other provision of 
law, in addition to any other disclosures that may be required, 
each policy under the National Flood Insurance Program shall 
state all conditions, exclusions, and other limitations 
pertaining to coverage under the subject policy, regardless of 
the underlying insurance product, in plain English, in boldface 
type, and in a font size that is twice the size of the text of 
the body of the policy.
    (b) Violations.--The Administrator may impose a civil 
penalty of not more than $50,000 on any person that fails to 
comply with subsection (a).
    (c) Disclosure of Coverage.--
            (1) Disclosure sheet.--Each policy under the 
        National Flood Insurance Program shall include a 
        standard disclosure sheet that is produced by the 
        Administrator that sets forth, in plain language--
                    (A) the definition of the term ``flood'' 
                for purposes of coverage under the policy;
                    (B) a description of what type of flood 
                forces are necessary so that losses from an 
                event are covered under the policy, including 
                overflow of inland or tidal waves, unusual and 
                rapid accumulation or runoff of a surface any 
                source, and mudflow;
                    (C) a statement acknowledging that a 
                standard flood insurance policy does not cover 
                basement improvements, such as finished walls, 
                floors, and ceilings, or personal property kept 
                in a basement;
                    (D) a statement acknowledging a standard 
                flood insurance policy does not include 
                coverage for personal property, but such 
                coverage may be purchased, for some personal 
                property contained in a basement, as well as 
                personal belongings contained elsewhere in the 
                dwelling;
                    (E) a statement of the other types and 
                characteristics of losses that are not covered 
                under the policy;
                    (F) a statement that the disclosure sheet 
                provides general information about the 
                policyholder's standard flood insurance policy;
                    (G) a statement that the standard flood 
                insurance policy, together with the 
                endorsements and declarations page, make up the 
                official contract and are controlling in the 
                event that there is any difference between the 
                information on the disclosure sheet and the 
                information in the policy;
                    (H) a statement that, if the policyholder 
                has any questions regarding information in the 
                disclosure sheet or policy, the policyholder 
                should contact the entity selling the policy on 
                behalf of the Program, together with contact 
                information sufficient to allow the 
                policyholder to contact such entity; and
                    (I) any other information that the 
                Administrator determines will be helpful to 
                policyholder in understanding flood insurance 
                coverage.
            (2) Acknowledgment sheet.--Each policy application 
        under the National Flood Insurance Program shall 
        include an acknowledgment sheet on which the 
        policyholder shall affirmatively--
                    (A) acknowledge that the policyholder 
                received the disclosure sheet required under 
                paragraph (1);
                    (B) accept or decline coverage for personal 
                property;
                    (C) accept or decline other optional 
                coverage that may be available;
                    (D) acknowledge the policyholder's 
                understanding that the standard flood insurance 
                policy, together with the endorsements and 
                declarations page, make up the official 
                contract and are controlling in the event that 
                there is any difference between the information 
                on the acknowledgment sheet and the information 
                in the policy; and
                    (E) acknowledge that the policyholder has 
                been provided and has reviewed a summary, which 
                may be the policy declarations page, of the 
                total cost, amount and extent of insurance 
                coverage provided under the policy.
    (d) Rule of Construction.--This section shall not be 
construed to void or alter the coverage terms of the underlying 
standard flood insurance policy and the corresponding 
endorsements. In the event that the customer does not 
affirmatively acknowledge the requirements under subsection 
(c)(2), a Write Your Own company may still issue the policy on 
behalf of the National Flood Insurance Program under such 
terms.

           *       *       *       *       *       *       *

                              ----------                              


          HOMEOWNER FLOOD INSURANCE AFFORDABILITY ACT OF 2014




           *       *       *       *       *       *       *
SEC. 24. DESIGNATION OF FLOOD INSURANCE ADVOCATE.

    (a) In General.--The Administrator shall designate a Flood 
Insurance Advocate to advocate for the fair treatment of policy 
holders under the National Flood Insurance Program and property 
owners in the mapping of flood hazards, the identification of 
risks from flood, and the implementation of measures to 
minimize the risk of flood.
    (b) Duties and Responsibilities.--The duties and 
responsibilities of the Flood Insurance Advocate designated 
under subsection (a) shall be to--
            (1) educate property owners and policyholders under 
        the National Flood Insurance Program on--
                    (A) individual flood risks;
                    (B) flood mitigation;
                    (C) measures to reduce flood insurance 
                rates through effective mitigation;
                    (D) the flood insurance rate map review and 
                amendment process; and
                    (E) any changes in the flood insurance 
                program as a result of any newly enacted laws 
                (including this Act);
            (2) assist policy holders under the National Flood 
        Insurance Program and property owners to understand the 
        procedural requirements related to appealing 
        preliminary flood insurance rate maps and implementing 
        measures to mitigate evolving flood risks;
            (3) assist in the development of regional capacity 
        to respond to individual constituent concerns about 
        flood insurance rate map amendments and revisions;
            (4) coordinate outreach and education with local 
        officials and community leaders in areas impacted by 
        proposed flood insurance rate map amendments and 
        revisions; and
            (5) aid potential policy holders under the National 
        Flood Insurance Program in obtaining and verifying 
        accurate and reliable flood insurance rate information 
        when purchasing or renewing a flood insurance policy.
    (c) Staff.--The Administrator shall ensure that the Flood 
Insurance Advocate has sufficient staff to carry out all of the 
duties and responsibilities of the Advocate under this section.

           *       *       *       *       *       *       *