[Federal Register Volume 77, Number 104 (Wednesday, May 30, 2012)]
[Proposed Rules]
[Pages 31814-31815]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-13017]
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DEPARTMENT OF HOMELAND SECURITY
Federal Emergency Management Agency
44 CFR Part 61
[Docket ID: FEMA-2011-0037]
RIN 1660-AA09 (Formerly 3067-AD02)
National Flood Insurance Program (NFIP); Insurance Coverage and
Rates
AGENCY: Federal Emergency Management Agency, DHS.
ACTION: Proposed rule; withdrawal.
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SUMMARY: The Federal Emergency Management Agency (FEMA) is withdrawing
a previously published Notice of Proposed Rulemaking (NPRM) concerning
National Flood Insurance Program (NFIP) insurance premium rates for
structures that have suffered multiple flood losses. The proposed rule
would have required owners of such structures to pay a higher premium
for flood insurance if they declined an offer of funding to eliminate
or reduce future flood damage. FEMA is withdrawing the NPRM because it
has been superseded by legislation.
DATES: The Notice of Proposed Rulemaking, published on August 5, 1999
(64 FR 42632), is withdrawn as of May 30, 2012.
ADDRESSES: The Notice of Proposed Rulemaking and this withdrawal notice
are available online at http://www.regulations.gov under docket ID
FEMA-2011-0037. Insert FEMA-2011-0037 in the ``Keyword'' box, and then
click ``Search.'' The Docket is also available for inspection or
copying at FEMA, 500 C Street SW., Room 840, Washington, DC 20472.
FOR FURTHER INFORMATION CONTACT: Thomas Hayes, Federal Insurance and
Mitigation Administration, DHS/FEMA, 1800 South Bell Street, Arlington,
VA 20598-3020. Phone: (202) 646-3419. Facsimile: (202) 646-7970. Email:
Thomas.Hayes@dhs.gov.
[[Page 31815]]
SUPPLEMENTARY INFORMATION:
I. Background
The National Flood Insurance Act of 1968, as amended, 42 U.S.C.
4001 et seq., authorizes FEMA to offer insurance against flood losses
through the National Flood Insurance Program (NFIP). The NFIP allows
FEMA to offer flood insurance at less-than-full-risk premium rates for
older structures. This is because Congress recognized that in
authorizing the NFIP there would be a trade-off: Participating local
governments would adopt and enforce flood mitigation standards that
make future construction resistant to future flood loss, but federally-
backed flood insurance would be available for older structures built
without the benefit of detailed flood risk information.
To implement the NFIP, FEMA has worked with communities to develop
the kind of detailed flood risk information needed for flood mitigation
efforts. This information is reflected in a community's Flood Insurance
Rate Map (FIRM). Many properties built before the publication of a
community's FIRM are at a greater risk of incurring flood loss because
they were constructed prior to the availability of full flood risk
information. These properties are discussed in FEMA's actuarial
studies, which show that the owners of buildings insured under the NFIP
that repetitively flood are not charged premiums that truly reflect the
risk.
One of FEMA's highest priorities is to correct the problem of
multiple flood losses to older structures (target repetitive loss
buildings) insured under the NFIP. The Notice of Proposed Rulemaking
(NPRM) defined target repetitive loss buildings as those with four or
more losses, or with two or more flood losses cumulatively greater than
the building's value. The NPRM proposed to apply full-risk premiums for
flood insurance coverage to a target repetitive loss building, if an
owner declined an offer of mitigation funding authorized by FEMA. Under
the proposed rule, if the owner of a target repetitive flood loss
building declined an offer of mitigation funding to relocate, elevate,
or flood-proof the structure, then that owner would, upon the next
policy renewal, have to pay full-risk premiums for flood insurance
coverage under the NFIP.
II. Summary of Comments
FEMA received seven comments on the NPRM from private parties and
interest groups. Generally, commenters supported the regulation. Some
had concerns that it needed to include greater detail on important
issues. Several commenters had reservations about the NPRM's possible
effects on the mortgage industry. Specifically, they discussed the
criteria banks use in issuing mortgages, such as a borrower's ability
to insure the building, which they stressed is the collateral for the
loan. If the insurance rate increases to the point where the borrower
can no longer afford insurance, the collateral for the mortgage is at
substantial risk and the mortgage is in jeopardy. This relationship to
the requirements of the NPRM caused concern that the NPRM could
destabilize the primary and secondary mortgage markets. Commenters also
expressed the opinion that public notice, or at least notice to the
mortgage holder, should be incorporated into the premium rate increase
process. Finally, one commenter was concerned that the NPRM would be
economically detrimental to homeowners who suffer from flood damages
through no fault of their own.
III. Reason for Withdrawal
FEMA is withdrawing the NPRM because it has been superseded by the
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (the
Act), Public Law 108-264, 118 Stat. 712, 42 U.S.C. 4001 note. The Act
amended the National Flood Insurance Act of 1968 by authorizing
increases to the flood insurance premium rates for building owners of
repetitive loss who decline offers of mitigation funding (section 102
of the Act; 42 U.S.C. 4102a). FEMA promulgated a final rule
implementing this amendment at 44 CFR part 79 on September 16, 2009 (74
FR 47471). Therefore, this NPRM is no longer necessary.
IV. Conclusion
FEMA is withdrawing the August 5, 1999 NPRM for the reasons stated
in this notice.
W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2012-13017 Filed 5-29-12; 8:45 am]
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