National Flood Insurance Program (NFIP); Group Flood Insurance Policy

FEDERAL EMERGENCY MANAGEMENT AGENCY

44 CFR Part 61

RIN 3067-AC35

National Flood Insurance Program (NFIP); Group Flood Insurance

Policy

AGENCY: Federal Emergency Management Agency (FEMA).

ACTION: Final rule.

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SUMMARY: We (FEMA) adopt as our final rule the interim rule that we

published establishing the Group Flood Insurance Policy (GFIP);

however, we are changing the term of the policy from thirty-six to

thirty-seven months.

EFFECTIVE DATE: July 30, 1999.

FOR FURTHER INFORMATION CONTACT: Charles M. Plaxico, Jr., Federal

Emergency Management Agency, Federal Insurance Administration,

(202)646-3422, (facsimile) (202)646-4327, or (email)

[email protected].

SUPPLEMENTARY INFORMATION: On May 1, 1996, we published in the Federal

Register (Vol. 61, page 19197) an interim final rule that establishes a

Group Flood Insurance Policy (GFIP) and authorizes its use for

recipients of grant awards under the IFG Program as authorized under

Sec. 411 of the Stafford Act (42 U.S.C. 5178). The purpose of that

interim final rule was to provide a temporary mechanism for the

recipients of IFG grants--often low-income persons or those on fixed

incomes--to have flood insurance coverage for a period of three years

following a flood loss so that they would have time to recover from the

disaster and be in a better position to buy flood insurance for

themselves after the expiration of their three-year policy term. We

received no comments during the comment period for the interim final

rule.

Under Sec. 582 of the National Flood Insurance Reform Act of 1994,

disaster victims must buy and maintain flood insurance in order to be

eligible for future disaster aid to repair damages for flood losses.

Toward that end, we contacted those States that have current GFIPs

offering information and our assistance to help current GFIP

certificate holders transition from group coverage to an individual

policy. We are aware that at least one State needs more time to work

with its GFIP certificate holders so that they will continue to be

eligible for future Federal disaster assistance flood damages to their

property.

This final rule will give both State governments and the GFIP

certificate

[[Page 41306]]

holders an additional month to make arrangements to buy and maintain

flood insurance beyond the current term for the GFIP of thirty-six

months.

National Environmental Policy Act

The requirements of 44 CFR Part 10, Environmental Consideration,

categorically exclude this final rule. We have not prepared an

environmental impact assessment.

Executive Order 12866, Regulatory Planning and Review

This final 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,

but attempts to adhere to the regulatory principles set forth in E.O.

12866. The Office of Management and Budget has not reviewed this final

rule under E.O. 12866.

Paperwork Reduction Act

This final rule does not contain a collection of information and

therefore is not subject to the provisions of the Paperwork Reduction

Act of 1995.

Executive Order 12612, Federalism

This final rule involves no policies that have federalism

implications under E.O. 12612, Federalism, dated October 26, 1987.

Executive Order 12778, Civil Justice Reform

This final rule meets the applicable standards of Sec. 2(b)(2) of

E.O. 12778.

Congressional Review of Agency Rulemaking.

We have sent this final rule to the Congress and to the General

Accounting Office under the Congressional Review of Agency Rulemaking

Act, Pub. L. 104-121. The rule is not a ``major rule'' within the

meaning of that Act. It is an administrative action in support of

normal day-to-day activities. It does not result in nor is it likely to

result in an annual effect on the economy of $100,000,000 or more. It

will not result in a major increase in costs or prices for consumers,

individual industries, Federal, State, or local government agencies, or

geographic regions. It will not have ``significant adverse effects'' on

competition, employment, investment, productivity, innovation, or on

the ability of United States-based enterprises to compete with foreign-

based enterprises. This final rule is exempt (1) from the requirements

of the Regulatory Flexibility Act, and (2) from the Paperwork Reduction

Act. The rule is not an unfunded Federal mandate within the meaning of

the Unfunded Mandates Reform Act of 1995, Pub. L. 104-4. It does not

meet the $100,000,000 threshold of that Act, and any enforceable duties

are imposed as a condition of Federal assistance or a duty arising from

participation in a voluntary Federal program.

List of Subjects in 44 CFR Part 61

Flood insurance.

Accordingly, we adopt the interim rule amending 44 CFR Part 61,

which was published at 61 FR 19197 on May 1, 1996, as the final rule

with the following change:

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 61.17 is revised to read as follows:

Sec. 61.17 Group Flood Insurance Policy.

(a) A Group Flood Insurance Policy (GFIP) is a policy covering all

individuals named by a State as recipients under Sec. 411 of the

Stafford Act (42 U.S.C. 5178) of an Individual and Family Grant (IFG)

program award for flood damage as a result of a major disaster

declaration by the President.

(b) The premium for the GFIP, initially, is a flat fee of $200 per

policyholder. Thereafter, the premium may be adjusted to reflect NFIP

loss experience and any adjustment of benefits under the IFG program.

(c) The amount of coverage will equal the maximum grant amount

established under Sec. 411 of the Stafford Act (42 U.S.C. 5178).

(d) The term of the GFIP will be 37 months and will begin 60 days

from the date of the disaster declaration.

(e) Coverage for individual grantees begins on the thirtieth day

after the NFIP receives the required data for individual grantees and

their premium payments.

(f) A Certificate of Flood Insurance will be sent to each

individual insured under the GFIP.

(g) The GFIP is the Standard Flood Insurance Policy Dwelling Form

(a copy of which is included in Appendix A(1) of this part), except

that:

(1) The GFIP provides coverage for losses caused by land

subsidence, sewer backup, or seepage of water without regard to the

requirement in paragraph B.3. of Article 3 that the structure be

insured to 80 percent of its replacement cost or the maximum amount of

insurance available under the NFIP.

(2) Article 7, Deductibles, does not apply to the GFIP. Instead, a

special deductible of $200 (applicable separately to any building loss

and any contents loss) applies to insured flood-damage losses sustained

by the insured property in the course of any subsequent flooding event

during the term of the GFIP. The separate deductible applicable to

Article 3 B.3 does not apply.

(3) Article 9 E., Cancellation of Policy by You, does not apply to

the GFIP.

(4) Article 9 G., Policy Renewal, does not apply to the GFIP.

(h) A notice will be sent to the GFIP certificate holders

approximately 60 days before the end of the 3-year term of the GFIP.

The notice will:

(1) Encourage them to contact a local insurance agent or producer

or a private insurance company selling NFIP policies under the Write

Your Own program of the NFIP to apply for a conventional NFIP Standard

Flood Insurance Policy; and

(2) Advise them as to the amount of coverage they must maintain in

order not to jeopardize their eligibility for future disaster

assistance. The amount of flood insurance coverage to be maintained by

certificate holders will be provided to the NFIP by the IFG program or

the State with its own fully funded disaster assistance program.

(Catalog of Federal Domestic Assistance No. 83.100, ``Flood

Insurance''; No. 83.516, ``Disaster Assistance'')

Dated: July 21, 1999.

Jo Ann Howard,

Administrator, Federal Insurance Administration.

[FR Doc. 99-19417 Filed 7-29-99; 8:45 am]

BILLING CODE 6718-03-P