[Federal Register Volume 61, Number 134 (Thursday, July 11, 1996)]
[Rules and Regulations]
[Pages 36513-36514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17668]


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FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Part 62

RIN 3067-AC47


National Flood Insurance Program; Allocated Loss Adjustment 
Expense

AGENCY: Federal Insurance Administration (FEMA).

ACTION: Technical amendment.

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SUMMARY: This document amends the interim final rule published on 
Wednesday, May 15, 1996, 61 FR 24462-24464, FR Doc. 96-12019, which 
revised the allocated loss adjustment expense fee schedule of the 
National Flood Insurance Program (NFIP) Write Your Own (WYO) Program 
under the Financial Assistance/Subsidy Arrangement (the Arrangement). 
This technical amendment revises the fee schedule of the interim final 
rule, restoring the previous basis for determining the amount of the 
flood loss and the resulting fees.

EFFECTIVE DATE: July 11, 1996.

FOR FURTHER INFORMATION CONTACT: Charles M. Plaxico, Jr., Federal 
Emergency Management Agency, Federal Insurance Administration, 500 C 
Street SW., Washington, DC 20472, (202) 646-3422.

SUPPLEMENTARY INFORMATION:

Background

    On May 15, 1996, the Federal Insurance Administration (FIA) 
published an interim final rule (FR Doc. 96-12019) that modified the 
allocated loss adjustment fee schedule of the National Flood Insurance 
Program (NFIP) Write Your Own Program under the Financial Assistance/
Subsidy Arrangement (the Arrangement). That interim final rule added 
new loss ranges and revised the fees for adjusting claims in the higher 
ranges under the NFIP. The revised fee schedule also contained 
footnotes establishing a new basis (replacement cost, not to exceed 
policy limits, in all cases) for determining the amount of loss.
    Before the May 15, 1996 changes, the amount of loss reported and 
used for determining the allocated loss adjustment fee was either on an 
actual cash value or a replacement cost basis, depending on how the 
loss was adjusted. Standard deductibles were applied in all cases. The 
May 15, 1996 changes required WYO companies to report losses, 
regardless of how they were adjusted, on a replacement cost basis. This 
requirement, however, is inconsistent with current systems reporting 
and recording capabilities.

Need To Correct Publication

    A number of WYO companies reported that they could not meet the 
reporting requirement of the May 15, 1996 interim final rule in a 
timely manner. In order to meet the reporting requirement, WYO 
companies need additional time to reprogram their data processing 
systems. FEMA agrees, and by this amendment reverts to the methods for 
calculating the amount of loss in effect before the May 15, 1996 
interim final rule. The new loss ranges and revised fees for the higher 
ranges remain the same as in the May 15, 1996 rule.
    The basis for determining fees contained in the May 15, 1996 
interim final rule will be honored from May 15, 1996 until today, the 
effective date of this revised interim final rule. FIA will provide 
separate guidance to WYO companies on how to handle financial reporting 
from May 15, 1996 until today.

Correction of Publication

    Accordingly, Exhibit A, Fee Schedule, of the publication of May 15, 
1996, at 61 FR 24463-24464, (FR Doc. 96-12019) is corrected to read as 
follows:

                        Exhibit A.--Fee Schedule                        
------------------------------------------------------------------------
          Range (by covered loss)                        Fee            
------------------------------------------------------------------------
Erroneous Assignment......................  $40.00                      
Closed Without Payment....................  125.00                      
Minimum for Upton-Jones Claims............  800.00                      
$0.01 to $600.00..........................  150.00                      
$600.01 to $1,000.00......................  175.00                      
$1,000.01 to $2,000.00....................  225.00                      
$2,000.01 to $3,500.00....................  275.00                      
$3,500.01 to $5,000.00....................  350.00                      
$5,000.01 to $7,000.00....................  425.00                      
$7,000.01 to $10,000.00...................  500.00                      
$10,000.01 to $15,000.00..................  550.00                      
$15,000.01 to $25,000.00..................  600.00                      
$25,000.01 to $35,000.00..................  675.00                      
$35,000.01 to $50,000.00..................  750.00                      
$50,000.01 to $100,000.00.................  3.0%                        
$100,000.01 to $250,000.00................  2.3% but not less than      
                                             $3,000.                    
$250,000.01 and up........................  2.1%                        
                                            but not less than           
                                            $5,750.                     
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[[Page 36514]]



    Note: Allocated fee schedule entry value is the covered loss 
under the policy based on the standard deductibles ($500 and $500) 
and limited to the amount of insurance purchased.

(Catalog of Federal Domestic Assistance No. 83.100, ``Flood 
Insurance'')

    Dated: June 2, 1996.
Harvey G. Ryland,
Deputy Director.
[FR Doc. 96-17668 Filed 7-10-96; 8:45 am]
BILLING CODE 6718-03-P