W6: Monday, May 2, 2011 W28: Tuesday , May 3, 2011

1. 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 W6: Monday, May 2, 2011 W28: Tuesday, May 3, 2011

2. Presenter: Joycelyn Collins

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

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

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

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)

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

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

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

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

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

12. Significant Changes

13. Presenter: Joe Cecil

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

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

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

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.

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

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

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

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 Applicationform

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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)

37. Presenter: Rita Hollada

38. Introduction NFIP MANUAL CHANGES • 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

39. The Application Process NFIP MANUAL CHANGES • 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

40. The Application Process NFIP MANUAL CHANGES • 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.

41. The Application Process NFIP MANUAL CHANGES 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 • 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.

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

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

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

45. Mailing and Payment NFIP MANUAL CHANGES • 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

46. Mailing and Payment NFIP MANUAL CHANGES • 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

47. Reduction or Reformation NFIP MANUAL CHANGES • 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

48. Transfer of Business/Assignment NFIP MANUAL CHANGES • 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

49. Evidence of Insurance NFIP MANUAL CHANGES • 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