2010-17977. National Flood Insurance Program (NFIP); Assistance to Private Sector Property Insurers, Availability of FY2011 Arrangement

AGENCY:

Federal Emergency Management Agency, DHS.

ACTION:

Notice.

SUMMARY:

Each year the Federal Emergency Management Agency (FEMA) is required by the Write-Your-Own (WYO) Program Financial Assistance/Subsidy Arrangement (Arrangement) to notify private insurance companies (Companies) and to make available to the Companies the terms for subscription or re-subscription to the Arrangement. In keeping with that requirement, this notice provides the terms to the Companies to subscribe or re-subscribe to the Arrangement.

FOR FURTHER INFORMATION CONTACT:

Edward L. Connor, DHS/FEMA, 1800 South Bell Street, Room 720, Arlington, VA 20598-3020, 202-646-3429 (phone), 202-646-3445 (facsimile), or [e-mail] (e-mail).

SUPPLEMENTARY INFORMATION:

Under the Write-Your-Own (WYO) Program Financial Assistance/Subsidy Arrangement (Arrangement), (90 as of June 1, 2010) private sector property insurers issue flood insurance policies and adjust flood insurance claims under their own names based on an Arrangement with the Federal Insurance Administration (FIA) published at 44 CFR part 62, appendix A. The WYO insurers receive an expense allowance and remit the remaining premium to the Federal Government. The Federal Government also pays flood losses and pays loss adjustment expenses based on a fee schedule. In addition, under certain circumstances reimbursement for litigation costs, including court costs, attorney fees, judgments, and settlements, are paid by the FIA based on documentation submitted by the WYO insurers. The complete Arrangement is published in 44 CFR part 62, appendix A. Each year FEMA is required to publish in the Federal Register and make available to the Companies the terms for subscription or re-subscription to the Arrangement.

Though not substantive, there has been a recent change to the marketing guidelines discussed in the Arrangement. As noted in the first sentence of the third paragraph of 44 CFR part 62, appendix A, Article III. B. of the Arrangement:

[t]he amount of expense allowance retained by the Company may increase a maximum of two percentage points, depending on the extent to which the Company meets the marketing goals for the Arrangement year contained in marketing guidelines established pursuant to Article II.G.

The marketing incentive percentage will remain the same. However, through a separate document the National Flood Insurance Program is revising its targeted goals regarding the criteria for growth.

During August 2010, FEMA will send a copy of the offer for the FY2011 Arrangement, together with related materials and submission instructions, to all private insurance companies participating under the current FY2010 Arrangement. Any private insurance company not currently participating in the WYO Program but wishing to consider FEMA's offer for FY2011 may request a copy by writing: DHS/FEMA, Mitigation Directorate, Attn: Edward L. Connor, WYO Program, 1800 South Bell Street, Room 720, Arlington, VA 20598-3020, or contact Edward Connor at 202-646-3445 (facsimile), or [e-mail] (e-mail).

Edward L. Connor,

Acting Federal Insurance and Mitigation Administrator, National Flood Insurance Program, Federal Emergency Management Agency, Department of Homeland Security.