# National Flood Insurance Program; Insurance Coverage and Rates > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A94-28154 ## Record - **Collection:** Federal Register - **Document type:** Uncategorized Document - **Published:** November 15, 1994 ## Text FEDERAL EMERGENCY MANAGEMENT AGENCY 44 CFR Part 61 RIN 3067-AC29 National Flood Insurance Program; Insurance Coverage and Rates AGENCY: Federal Insurance Administration, FEMA. ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: This proposed rule would amend the National Flood Insurance Program (NFIP) regulations to increase the waiting period before which flood insurance coverage becomes effective under the Standard Flood Insurance Policy and to increase the limits of coverage available under the NFIP. This proposed rule is necessary to comply with the waiting period requirement and maximum flood insurance coverage amounts established by the National Flood Insurance Reform Act of 1994 (Title V of Pub. L. 103-325). The intended effect of this proposed rule is to establish a 30-day waiting period, with certain exceptions, before which flood insurance coverage becomes effective under the Standard Flood Insurance Policy and to provide higher limits of flood insurance coverage to current and new policyholders. In this proposed rule, FEMA is also requesting comments regarding a study it is conducting on the waiting period as required by section 579 of the National Flood Insurance Reform Act of 1994. DATES: Comments are requested and must be received by December 30, 1994. ADDRESSES: Comments should be sent to the Rules Docket Clerk, Office of the General Counsel, Federal Emergency Management Agency, 500 C Street, SW., room 840, Washington, DC 20472, (fax) (202) 646-4536. 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: In the National Flood Insurance Reform Act of 1994 (the Reform Act), Congress reacted to the flooding which has occurred in recent years (particularly the Midwest flooding in the summer of 1993 and the amount of advance warning which people downstream of the flooding had in excess of the 5-day waiting period then and currently in effect), by enacting legislation requiring a 30- day waiting period, with two exceptions. One exception to the 30-day waiting period authorized by Congress applies to the initial purchase of flood insurance in connection with the making, increasing, extension, or renewal of a loan. In such an instance, the coverage with respect to the property which is the subject of the loan shall be effective as of the time of the loan closing, provided the flood insurance policy is applied for and the presentment of payment of premium is made at or prior to the loan closing. The other exception to the 30-day waiting period authorized by Congress applies to the initial purchase of flood insurance during the one-year period following the issuance of a revised flood map for a community. In such an instance, the coverage is to be effective at 12:01 a.m. (local time) on the first calendar day after the application date and the presentment of payment of premium. The Reform Act provides that the one-year period starts on the date of publication of the notice of the revision and requires that the notice be published not later than 30 days after the effective date of the map revision. Since agents using flood maps automatically get copies of revised maps with the effective date of the revision shown on the map but may not see the new notice that is required, FEMA is interpreting the period for this exception to be the 13-month period beginning on the effective date of the map revision. The current exception to the waiting period provision when a flood insurance policy is to be issued as a ``companion policy'' to another policy such as a homeowners policy or a standard fire insurance policy is not authorized by the Reform Act. Therefore, this rule proposes to remove the provisions currently in Sec. 61.11(f)(1) regarding the calculation of the waiting period when the flood insurance policy is to be issued with an effective date to be identical to a ``companion policy.'' In the Reform Act, Congress also increased the maximum limits of coverage available under the NFIP. The new maximum limits of building coverage are $250,000 for residential structures and $500,000 for all other structures and the new maximum limits of coverage are $100,000 for contents in residential structures and $500,000 for contents in nonresidential structures. With respect to a residential condominium building in a regular program community, the maximum limit of building coverage is $250,000 times the number of units in the building (not to exceed the building's replacement cost). The last time Congress increased the coverage limits was in the Housing and Community Development Act of 1977 (Pub. L. 95-128). In the Reform Act, Congress also required FEMA to conduct a study to determine the appropriateness of existing requirements regarding the effective date and time of coverage under flood insurance contracts obtained through the national flood insurance program. Congress stipulated that, in conducting the study, the Director shall determine whether any delay between the time of purchase of flood insurance coverage and the time of initial effectiveness of the coverage should differ for various classes of properties (based upon the type of property, location of the property, or any other factors related to the property) or for various circumstances under which such insurance was purchased. FEMA invites comments from the public on any aspects of the waiting period which they consider to be germane. FEMA will consider any comments received as it conducts the study. National Environmental Policy Act This proposed rule is categorically excluded from the requirements of 44 CFR Part 10, Environmental Consideration. No environmental impact assessment has been prepared. Executive Order 12898, Environmental Justice The socioeconomic conditions relating to this proposed rule were reviewed and a finding was made that no disproportionately high and adverse effect on minority or low income populations result from this proposed rule. Executive Order 12866, Regulatory Planning and Review This proposed rule is not a significant regulatory action within the meaning of Sec. 2(f) of E.O. 12866 of September 30, 1993, 58 FR 51735, and has not been reviewed by the Office of Management and Budget. Nevertheless, this proposed rule adheres to the regulatory principles set forth in E.O. 12866. Paperwork Reduction Act This proposed rule does not contain a collection of information requirement as described in section 3504(h) of the Paperwork Reduction Act. Executive Order 12612, Federalism This proposed rule involves no policies that have federalism implications under Executive Order 12612, Federalism, dated October 26, 1987. Executive Order 12778, Civil Justice Reform This proposed rule meets the applicable standards of section 2(b)(2) of Executive Order 12778. List of Subjects in 44 CFR Part 61 Flood insurance Accordingly, 44 CFR part 61 is proposed to be amended as follows: PART 61--INSURANCE COVERAGE AND RATES 1. The authority citation for Part 61 continues to read as follows: Authority: 42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; E.O. 12127 of Mar. 31, 1979, 44 FR 19367, 3 CFR, 1979 Comp., p. 376. 2. Section 61.6 is revised to read as follows: Sec. 61.6 Maximum amounts of coverage available. (a) Pursuant to section 1306 of the Act, the following are the limits of coverage available under the emergency program and under the regular program. Regular Program ------------------------------------------------------------------------ Regular program ----------------------------------------- Emergency program\1\ Total amount -------------- Second layer available First layer ------------------------------------------------------------------------ Single Family Residential Except in Hawaii, Alaska, Guam, U.S. Virgin Islands.... 35,000 215,000 250,000 In Hawaii, Alaska, Guam, U.S. Virgin Islands............... 50,000 200,000 250,000 Other Residential Except in Hawaii, Alaska, Guam, U.S. Virgin Islands.... 100,000 150,000 250,000 In Hawaii, Alaska, Guam, U.S. Virgin Islands............... 150,000 100,000 250,000 Nonresidential Small business................ 100,000 400,000 500,000 Churches and other properties. 100,000 400,000 500,000 Contents\2\ Residential................... 10,000 90,000 100,000 Small business................ 100,000 400,000 500,000 Churches, other properties.... 100,000 400,000 500,000 ------------------------------------------------------------------------ \1\1 Only first layer available under emergency program. \2\Per unit. (b) In the insuring of a residential condominium building in a regular program community, the maximum limit of building coverage is $250,000 times the number of units in the building (not to exceed the building's replacement cost). 2. Section 61.11 is amended as follows: a. By revising paragraphs (a), (b), and (c) to read as follows: Sec. 61.11 Effective date and time of coverage under the Standard Flood Insurance Policy--New Business Applications and Endorsements. (a) During the one-year period following the issuance of a revised Flood Hazard Boundary Map or Flood Insurance Rate Map for a community, the effective date and time of any new flood insurance coverage shall be 12:01 a.m. (local time) on the first calendar day after the application date and the presentment of payment of premium; for example, a flood insurance policy applied for with the payment of the premium on May 1 will become effective at 12:01 a.m. on May 2. (b) Where the initial purchase of flood insurance is in connection with the making, increasing, extension, or renewal of a loan, the coverage with respect to the property which is the subject of the loan shall be effective as of the time of the loan closing, provided the written request for the coverage is received by the NFIP when the flood insurance policy is applied for and the presentment of payment of premium is made at or prior to the loan closing. (c) Except as provided by paragraphs (a) and (b) of this section, the effective date and time of any new policy or added coverage or increase in the amount of coverage shall be 12:01 a.m. (local time) on the 30th calendar day after the application date and the presentment of payment of premium; for example, a flood insurance policy applied for with the payment of the premium on May 1 will become effective at 12:01 a.m. on May 31. * * * * * Sec. 61.11 [Amended] b. In paragraph (e), by removing, in the second sentence, the phrase ``(P.O. Box 459, Lanham, Maryland 20706)''. c. By removing paragraphs (f) (1) and (2) and by redesignating paragraph (f)(3) as paragraph (g). d. In newly redesignated paragraph (g), remove the word ``this''. (Catalog of Federal Domestic Assistance No. 83.100, ``Flood Insurance'') Dated: November 7, 1994. Elaine A. McReynolds, Administrator, Federal Insurance Administration. [FR Doc. 94-28154 Filed 11-14-94; 8:45 am] BILLING CODE 6718-05-P --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-28154. Public record. Not legal advice.