[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
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Range (by covered loss) Fee
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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
