To require the use of replacement cost value in determining the premium rates for flood insurance coverage under the National Flood Insurance Act, and for other purposes.

I 116TH CONGRESS 1ST SESSION H. R. 469 To require the use of replacement cost value in determining the premium rates for flood insurance coverage under the National Flood Insurance Act, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JANUARY 10, 2019 Mr. LUETKEMEYER introduced the following bill; which was referred to the Committee on Financial Services A BILL To require the use of replacement cost value in determining the premium rates for flood insurance coverage under the National Flood Insurance Act, and for other pur- poses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. USE OF REPLACEMENT COST IN DETERMINING 3 PREMIUM RATES. 4 (a) STUDY OF RISK RATING REDESIGN FLOOD IN- 5 SURANCE PREMIUM RATING OPTIONS.— 6 VerDate Sep 11 2014 02:12 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H469.IH H469 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 469 IH (1) STUDY.—The Administrator of the Federal 1 Emergency Management Agency shall conduct a 2 study to— 3 (A) evaluate insurance industry best prac- 4 tices for risk rating and classification, including 5 practices related to replacement cost value in 6 premium rate estimations; 7 (B) assess options, methods, and strategies 8 for including replacement cost value in the Ad- 9 ministrator’s estimates under section 10 1307(a)(1) of the National Flood Insurance Act 11 of 1968 (42 U.S.C. 4014(a)(1)); 12 (C) provide recommendations for including 13 replacement cost value in the estimate of the 14 risk premium rates for flood insurance under 15 such section 1307(a)(1); 16 (D) identify an appropriate methodology to 17 incorporate replacement cost value into the Ad- 18 ministrator’s estimates under such section 19 1307(a)(1); and 20 (E) develop a feasible implementation plan 21 and projected timeline for including replace- 22 ment cost value in the estimates of risk pre- 23 mium rates for flood insurance made available 24 under the National Flood Insurance Program. 25 VerDate Sep 11 2014 02:12 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H469.IH H469 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 469 IH (2) REPORT.— 1 (A) REQUIREMENT.—Not later than the 2 expiration of the 12-month period beginning on 3 the date of the enactment of this Act, the Ad- 4 ministrator shall submit to the Committee on 5 Financial Services of the House of Representa- 6 tives and the Committee on Banking, Housing, 7 and Urban Affairs of the Senate a report that 8 contains the results and conclusions of the 9 study required under paragraph (1). 10 (B) CONTENTS.—The report submitted 11 under subparagraph (A) shall include— 12 (i) an analysis of the recommenda- 13 tions resulting from the study under para- 14 graph (1) and any potential impacts on the 15 National Flood Insurance Program, includ- 16 ing cost considerations; 17 (ii) a description of any actions taken 18 by the Administrator to implement the 19 study recommendations; and 20 (iii) a description of any study rec- 21 ommendations that have been deferred or 22 not acted upon, together with a statement 23 explaining the reasons for such deferral or 24 inaction. 25 VerDate Sep 11 2014 02:12 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H469.IH H469 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 469 IH (b) USE OF REPLACEMENT COST VALUE IN PRE- 1 MIUM RATES; IMPLEMENTATION.— 2 (1) ESTIMATED RATES.—Paragraph (1) of sec- 3 tion 1307(a) of the National Flood Insurance Act of 4 1968 (42 U.S.C. 4014(a)(1)) is amended, in the 5 matter preceding subparagraph (A), by inserting 6 after ‘‘flood insurance’’ the following: ‘‘, which shall 7 incorporate replacement cost value, and’’. 8 (2) CHARGEABLE RATES.—Subsection (b) of 9 section 1308 of the National Flood Insurance Act of 10 1968 (42 U.S.C. 4015(b)) is amended, in the matter 11 preceding paragraph (1), by inserting after ‘‘Such 12 rates’’ the following: ‘‘shall incorporate replacement 13 cost value and’’. 14 (3) EFFECTIVE DATE.—The amendments under 15 paragraphs (1) and (2) of this subsection shall be 16 made upon the expiration of the 12-month period 17 beginning on the date of the enactment of this Act. 18 (4) APPLICABILITY AND PHASE-IN.—The Ad- 19 ministrator of the Federal Emergency Management 20 Agency shall apply the amendments under para- 21 graphs (1) and (2) to flood insurance coverage made 22 available under the National Flood Insurance Act of 23 1968 for properties located in various geographic re- 24 gions in the United States such that— 25 VerDate Sep 11 2014 02:12 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H469.IH H469 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 469 IH (A) over the three-year period beginning 1 upon the expiration of the period referred to in 2 paragraph (3) of this subsection, the require- 3 ment under such amendments shall be gradu- 4 ally phased in geographically throughout the 5 United States as sufficient information for such 6 implementation becomes available; and 7 (B) after the expiration of such period re- 8 ferred to in subparagraph (A), such amend- 9 ments shall apply to all flood insurance cov- 10 erage made available under the National Flood 11 Insurance Act of 1968. 12 Æ VerDate Sep 11 2014 02:12 Jan 25, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H469.IH H469 pamtmann on DSKBFK8HB2PROD with BILLS