FEMA Issues New Flood Premium Rate Changes Effective 10/1/14
The Federal Emergency Management Agency (FEMA) issued W-14027, Revision to Compliance Date for Large-Font Policy Documents on 5/30/14, which revises and further delays the compliance date for large-font policy documents.
Most importantly, FEMA is sending new flood insurance premium rate sheets to insurers that reflect the provisions of the 2014 Homeowner Flood Insurance Affordability Act. According to a memo sent to the Write Your Own (WYO) companies (reproduced below), the new premiums show rate increases in each risk class, effective October 1, 2014. The new rates are included in Bulletin w-14026:
w-14026 October 1, 2014 Program Changes – Section 5 of the Homeowner Flood Insurance Affordability Act of 2014 (HR 3370); issued 5/29/14.
U.S. Department of Homeland Security
500 C Street, SW
Washington, DC 20472
May 29, 2014
The purpose of this memorandum is to provide notification of program rate changes the NFIP will implement effective October 1, 2014. The October 1, 2014 rate changes revise premium rate tables to comply with Section 5 of the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) Pub. Law No. 113-89 (March 21, 2014), which prohibits FEMA from increasing premiums more than 15 percent a year within a single risk class and not more than 18 percent for an individual policy. In every case, the attached rates are the same or lower than the October 1, 2013 premium rates. The attached HFIAA Section 5 premium rates are to be used for all new and renewal policies effective on or after October 1, 2014.
**FEMA will also use these rate tables to calculate premium refunds required under Section 3 of HFIAA. Additionally, to the extent a policyholder was charged a premium in excess of the premium increase caps mandated under Section 5 of HFIAA, FEMA will use these rate tables to calculate the refund.
FEMA will continue consulting with WYO companies to finalize refund guidance for facilitating refunds under Sections 3 and 5 of HFIAA. The guidance will include underwriting and accounting guidelines, modifications to the Transaction Record Reporting and Processing (TRRP) Plan, the accounting exhibits, and edit specifications document. FEMA anticipates finalizing its guidance by July 2014 with refunds beginning in fall 2014.
For comments or questions, please contact Joe Cecil at (202) 212-2067.
[End of FEMA memo.]
On May 16, 2014, PIA issued a Special Edition Newsline, with information for the National Flood Insurance Program (NFIP) that we’ve been sharing over the last two months to that point.