Flood Insurance Reform Implementation Status–U.S. Government Accountability Office Reports to U.S. House Financial Services’ Maxine Waters

Feb 19, 2015


In a report to U.S. House Financial Services Committee Ranking Member Maxine Waters (D-CA) today, February 19, 2015, the U.S. Government Accountability Office (“GAO”) reviewed the Federal Emergency Management Agency’s (“FEMA’s”) implementation of the Homeowner Flood Insurance Affordability Act of 2014 (“HFIAA”), which amended the Biggert-Waters Flood Insurance Reform Act of 2012 (“Biggert-Waters”).

Administered by FEMA, the National Flood Insurance Program (“NFIP”) has faced significant financial and management challenges over the years.  Biggert-Waters instituted provisions to help strengthen the NFIP’s future financial solvency and administrative efficiency.  For example, it required FEMA to phase out almost all discounted insurance premiums and establish a reserve fund.  As implementation proceeded, however, affected communities raised concerns about some Biggert-Waters requirements.

In response, the enaction of HFIAA sought to address NFIP premium affordability concerns by repealing or altering some of those provisions.  

Subsequently, the GAO was asked to examine the status of FEMA’s implementation of Biggert-Waters Act as amended by the HFIAA.

To date, FEMA has established some practices for managing its implementation of required changes under Biggert-Waters as amended by the HFIAA.   Consistent with related federal internal control standards, the GAO determined that FEMA has collaborated with stakeholders on prioritizing legislative requirements and developed methods to track the status of its implementation efforts.   For example, FEMA formed a team of key staff to oversee these efforts and monitor progress through a tracking document that is regularly updated.  However, FEMA and representatives of organizations with flood insurance expertise cited a number of challenges that FEMA faces in implementing the new requirements, including resource issues, the complexity of the legislation, and the need to balance the NFIP’s financial solvency and affordability goals.

FEMA estimated that it had met requirements to complete almost half of Biggert-Waters’ sections, about one-third of HFIAA sections as of December 2014, and was taking action on others, including required studies.

Among those actions:

  • FEMA prioritized and implemented important HFIAA rate changes that repealed some Biggert-Waters rate increases and also initiated refunds to policyholders.  However, data limitations have delayed implementation of some other requirements.  For example, FEMA is required to make rate changes for business properties.  Currently, FEMA cannot distinguish among nonresidential property policies for businesses, nonprofits and others.  FEMA anticipates collecting more specific data in late 2015 that will allow it to make the required adjustments.
  • As required by Biggert-Waters, FEMA established the Technical Mapping Advisory Council (which held its first meeting in September 2014) and anticipates implementing additional Biggert-Waters mapping requirements over the next several years.
  • FEMA reported that it had almost fully implemented Biggert-Waters mitigation assistance requirements and had begun researching alternative mitigation methods as required by the HFIAA.
  • FEMA had also begun implementing outreach and affordability requirements, including establishing an interim Office of the Flood Insurance Advocate.
  • FEMA also made progress in providing mapping-related notifications to Congress.
  • FEMA is considering methods for providing access to any available property-level data to policyholders that would help clearly communicate flood risk.
  • FEMA has taken some action on an affordability study that the two laws require, but data challenges have delayed progress.  The study is required to analyze the impact of eliminating all discounted NFIP premiums (such as subsidized premiums), but FEMA cannot identify all properties that are receiving the discounts.  In February and September 2015, the National Academy of Sciences is to deliver two reports that identify approaches for an NFIP affordability framework and nationwide affordability study, respectively.

To access  the GAO report, which describes (1) FEMA’s management of  Biggert-Waters’ and HFIAA  implementation, and associated challenges and (2) the status of FEMA’s implementation of selected requirements from both laws, click here.


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