1. W6: Monday, May 2, 2011 W28: Tuesday, May 3, 2011 W6/W28 – The NFIP Flood Insurance Manual: All the Right Notes Presenters: Joycelyn Collins and Joe Cecil from FEMA Rita Hollada from FIPNC Facilitator: Corise Morrison from IBHS 1

2. Presenter: Joycelyn Collins 2

3. Overview Introduction Timeline and Process Drivers Workgroup Comments Access General Changes 3

4. Behind the Scenes Timeline May and October each year 6-month advance notice Process Complex coordination Work – “toil and effort, with pain and fatigue, over an extended period of time” Teamwork 4

5. Behind the Scenes Drivers Legislation Congressional inquiries Lawsuits The constraints of the CFR or OMB processes Questions and suggestions from NFIP stakeholders 5

6. Behind the Scenes Jazz “ American music developed esp. from ragtime and blues and characterized by propulsive syncopated rhythms, polyphonic ensemble playing, varying degrees of improvisation, and often deliberate distortions of pitch and timbre.” (sounds like the Flood Insurance Manual) 6

7. Behind the Scenes The FIM Jazz Ensemble FEMA staff NFIP Bureau staff CRS contractor NFIP Direct You 7

8. Behind the Scenes Comments on May 2011 Edition Solicitation Bulletin W-10088, by September 30, 2010 IBHS and FIPNC, Limited Review, Dec-Jan Summary Resolution Ongoing – send comments to: iServiceUnderwriting@ostglobal.com 8

9. Behind the Scenes Access Online http://www.fema.gov/business/nfip/ manual.shtm Subscription Hardcopy - $35 CD - $25 9

10. General Changes Throughout the Manual Format Reformatted using different software Improved format consistency and spacing in text and tables Capitalization of official form titles vs. lower case generic forms Less reliance on cross-references Most cross-references by section and/or subsection, rather than page number 10

11. General Changes Throughout the Manual Language Performed universal grammar review Removed obsolete references Used “insurer” and “Agent/Producer” Clearly stated requirements, using words like “required” or “must” Clarified effective date rules Distinguished “standard-rated policy” from “Standard Flood Insurance Policy (SFIP)” Removed all references to “estimated” BFE 11

12. Significant Changes 12

13. Presenter: Joe Cecil 13

14. Introductory Sections Cover – New Photograph and Layout Table of Contents – Page numbers have changed Reference – Updated names and contact information 14

15. General Rules Building over water (originally built on land) Building Occupancy definitions Reformatted Effective Date Subsection Policy reformation at the time of loss Buildings in more than one zone or BFE 15

16. Application Step-by-Step Instructions Identifying the Correct Community Building Occupancy definitions Walled and Roofed versus Under Construction Breakaway Wall Certification requirement in V Zones Underpayment handling clarified 16

17. Rating Added the tentative rate tables Clarified footnotes Clarified the application of the Replacement Cost Ratio when maximum coverage is less than 75% of the RCV Clarified grandfathering rule application to D zone properties newly designated in SFHA after the 2-year PRP eligibility extension expires. 17

18. Condominiums Updated underwriting guideline tables Added clarifying language regarding building ownership Addressed policy reformation Added language from the SFIP Dwelling Form indicating that loss assessment coverage under the Dwelling Form cannot be used to satisfy the deductibles or co-insurance under the RCBAP 18

19. Lowest Floor Guide Attached garage next to non-elevated single- family building excluded from rating Attached garage next to elevated building is an enclosure Correction to LFG 41/42 regarding vented crawlspaces under Pre-FIRM elevated buildings. Many change bars reflect that references are to actual Rate Tables, rather than rating methodology 19

20. Certifications The original EC is no longer required Use the most current EC (unless grandfathering) Floodproofing photograph requirement Non-residential floodproofing: shields or other methods must be visible 20

21. Preferred Risk Policy Clarification that the PRP is an SFIP 2-year PRP eligibility extension rules added October 2010 Clarification that loss history is determined by separate events (not separate payments for the same event) Clarified conversion of standard-rated policy to PRP under the extension at renewal Added step-by-step instructions to the PRP Application form 21

22. Mortgage Portfolio Protection Program Minor changes to be consistent with the rest of the Manual 22

23. Endorsements Retroactive conversion of standard-rated policy to a PRP discovered to have been eligible for the extension follows rules for misrating No change for conversion of standard-rated policy to PRP for other reasons Throughout the Manual, we use the term “General Change Endorsement Form” only where actually required 23

24. Policy Renewals Guidance for transfers  Note that all underwriting information is required  The previous Declarations may be used for the LFE and BFE, but you may need additional information Forms are updated 24

25. Cancellation/Nullification Clarified that each unit owners’ mortgagee, or the unit owner when there is no mortgagee, must sign the release for an RCBAP for RC 9 or 19 Clarified which Reason Codes do not require the policyholder’s signature 25

26. Claims Rearranged the section for flow No significant or substantial change 26

27. Policy Page numbers may have shifted due to formatting No change to language 27

28. Flood Maps Updated forms and web site information New example on MAP 7 28

29. Provisional Rating Clarified instructions for completing the form Corrected the rating example 29

30. Coastal Barrier Resources System Updated tables Expect procedural changes in future editions 30

31. Community Rating System Discount Certification language for subgrade crawlspaces Updated tables 31

32. Severe Repetitive Loss Properties No significant change In October, new sample letters Beginning October 1, 2011, underwriting files must be sent to the SDF 32

33. Guidance for Leased Federal Properties No significant change Clarifications regarding when to apply the tentative rate procedure 33

34. Definitions BFE reworded to make easier to copy Grandfathering definition clarifies distinction between statutory grandfathering and administrative grandfathering Building Occupancy definitions are consistent with GR, APP, and PRP The definitions of the Policy Forms are enhanced 34

35. Index Call Steve Van Dyke if you ever have a tedious task requiring attention to detail 35

36. October 1, 2011 Rate Increases EC requirement for Post-FIRM Unnumbered A, AO and AH zones Conversion of PRP to standard-rated policy procedure CBRS documentation requirements SRL procedure New obstruction codes for elevators Clarifications for obstruction codes 70 and 80 Cancellation Reason Codes 12 and 18 (TRRP 52) 36

37. Presenter: Rita Hollada 37

38. NFIP MANUAL CHANGES Introduction Issues I will discuss …….. – The Application Process – Mailing and Payment Requirements – Reduction and Reformation of Coverage due to insufficient payment – Transfer and Assignment of Existing Policies – Acceptable Evidence of Coverage 38

39. NFIP MANUAL CHANGES The Application Process The National Flood Insurance Program (NFIP) Flood Insurance Application form, or a similar form for Write Your Own (WYO) Companies, must be used for all flood insurance policies except the Preferred Risk Policy Section APP has been expanded and illustrated to clarify the requirements for completion of the application PART 1 – the Agent/Producer must sign and date and is responsible for the completeness and accuracy of the information 39

40. NFIP MANUAL CHANGES The Application Process The application has been incorporated within the text, with definitions and explanations to aid in obtaining accurate information EXAMPLE: Check YES if the building is an elevated building; otherwise, check NO. An elevated building is a building that has no basement and that has its lowest elevated floor raised above ground level by foundation walls, shear walls, posts, piers, pilings, or columns. 40

41. NFIP MANUAL CHANGES The Application Process OCTOBER 2010 To complete Part 2 of the Application, the producer must: Obtain all necessary information from the applicant. The applicant or the applicant's representative must complete all numbered sections of the form, check all appropriate boxes, provide all information, and respond to all YES/NO questions that are applicable to the building. NEW REQUIREMENT COMPLETING PART 2 OF THE FLOOD INSURANCE APPLICATION FORM After completing Part 1 of the Flood Insurance Application, the agent/producer must complete all relevant items in Section 1 of Part 2 for all buildings. There is no signature required on Part 2 41

42. NFIP MANUAL CHANGES The Application Process Part 2 – Section I may require a site inspection by the agent/producer or reference to an elevation certificate if available 42

43. NFIP MANUAL CHANGES The Application Process Part 2 – Section II is required for all Elevated Buildings – Breakaway walls other than lattice or screening must include certification 43

44. NFIP MANUAL CHANGES The Application Process Part 2 – Section III is required for all Manufactured Homes 44

45. NFIP MANUAL CHANGES Mailing and Payment Full payment must accompany the application – If the premium received is not enough to buy the kind and amount of coverage requested, the policy will be issued for only the kind and amount of coverage that can be purchased for the premium payment received. Application and payment must be received within 10 days or mailed by certified mail within 4 days of the date of application – Certified Mail includes certain third party delivery services such as Fed Ex and UPS Page GR 8 45

46. NFIP MANUAL CHANGES Mailing and Payment Presentment of premium for Loan Closing – For a loan closing, premium payment from the escrow account (lender’s check), title company, or settlement attorney is considered made at closing, if the premium is received by the writing company within 30 days of the closing date. – If the premium payment is not part of the closing, the closing date is the effective date only if the application date is on or before the closing and the application and premium payment are received by the writing company within 10 days of the closing date. Page GR 8 46

47. NFIP MANUAL CHANGES Reduction or Reformation If premium payment not sufficient, the policy will provide only such insurance as can be purchased for the amount of premium received with two exceptions if discovered after a loss – The reduction will be effective the date of discovery – Policyholders will have the originally requested limits and then 30 days to pay the additional premium to restore the limits for the rest of the policy term The policy must be issued using the correct policy form for these exceptions to apply Page GR 12 47

48. NFIP MANUAL CHANGES Transfer of Business/Assignment A building owner’s policy may be assigned to a purchaser with the written consent of the seller The new insurer must collect all required underwriting information – May use the elevation information on the Declarations only when the BFE and LFE provided – Photos will be required on an individual policy A PRP requires documentation of eligibility and verification of zone (historic map information) An RCBAP requires all information including photos and RCV Page GR 15 48

49. NFIP MANUAL CHANGES Evidence of Insurance The NFIP does not recognize binders – A copy of the application and premium payment sufficient for proof of purchase for new policies A copy of the declarations page is sufficient proof of coverage – The NFIP recognizes the Certificate of Property Insurance or the Evidence of Insurance for Renewal Policies Certain information must be provided, including current flood zone and rated flood zone (if grandfathered or the PRP eligibility extension) – ACCORD 29 is the newly approved Evidence of Flood Insurance Page GR 14 49

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51. Thank You 51