What This Bill Does
This bill gives the Federal Emergency Management Agency Administrator the power to end contracts between certain service providers and flood insurance companies if those providers harm the National Flood Insurance Program. The bill also requires the Administrator to give advance notice and allow people to appeal the decision.
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Who It Affects
- The Federal Emergency Management Agency Administrator
- Attorneys and law firms that work with flood insurance companies
- Consultants and third-party companies that provide services to flood insurance companies
- Write Your Own companies (regular property and casualty insurance companies that sell flood insurance policies)
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Key Provisions
- The Administrator can terminate a contract if a covered entity (a service provider) engages in conduct that harms the National Flood Insurance Program, but must give 14 days advance notice before terminating (Sec. 1349(b)(1))
- Covered entities can appeal a contract termination decision by using an appeal process the Administrator must establish (Sec. 1349(b)(2))
- Neither the Administrator nor Write Your Own companies must pay early termination fees when a contract is terminated under this law (Sec. 1349(b)(3))
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What Changes
If this becomes law, the Administrator gains the authority to end contracts with service providers without following other existing legal requirements, as long as proper notice is given. Service providers will have the ability to challenge these terminations.
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Important Definitions
- "Covered entity": any attorney, law firm, consultant, or third-party company that provides services to a Write Your Own company
- "Write Your Own company": a regular property and casualty insurance company that participates in a cooperative arrangement with the federal government to write and service standard flood insurance policies
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Effective Date
The law takes effect on the date it becomes law and applies to any new contracts signed after that date (Sec. 2(b)(1) and (2))
II
118TH CONGRESS
1ST SESSION
S. 1039
To authorize the Administrator of the Federal Emergency Management Agen-
cy to terminate certain contracts on the basis of detrimental conduct
to the National Flood Insurance Program, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 29, 2023
Mr. KENNEDY (for himself and Mr. MENENDEZ) introduced the following bill;
which was read twice and referred to the Committee on Banking, Hous-
ing, and Urban Affairs
A BILL
To authorize the Administrator of the Federal Emergency
Management Agency to terminate certain contracts on
the basis of detrimental conduct to the National Flood
Insurance Program, and for other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘National Flood Insur-
4
ance Program Consultant Accountability Act of 2023’’.
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•S 1039 IS
SEC. 2. TERMINATION OF CERTAIN CONTRACTS UNDER
1
THE
NATIONAL
FLOOD
INSURANCE
PRO-
2
GRAM.
3
(a) IN GENERAL.—Part C of chapter II of the Na-
4
tional Flood Insurance Act of 1968 (42 U.S.C. 4081 et
5
seq.) is amended by adding at the end the following:
6
‘‘SEC. 1349. TERMINATION OF CONTRACTS.
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‘‘(a) DEFINITIONS.—In this section—
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‘‘(1) the term ‘covered entity’ means any attor-
9
ney, law firm, consultant, or third-party company
10
that provides services to a Write Your Own com-
11
pany; and
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‘‘(2) the term ‘Write Your Own company’
13
means a company participating in the cooperative
14
undertaking between the insurance industry and the
15
Federal Insurance and Mitigation Administration
16
that allows participating property and casualty in-
17
surance companies to write and service standard
18
flood insurance policies.
19
‘‘(b) TERMINATION.—
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‘‘(1) IN GENERAL.—Notwithstanding any other
21
provision of law, the Administrator may terminate a
22
contract or other agreement between a covered enti-
23
ty and a Write Your Own company if the Adminis-
24
trator—
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•S 1039 IS
‘‘(A) determines that the covered entity
1
has engaged in conduct that is detrimental to
2
the flood insurance program authorized under
3
chapter I; and
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‘‘(B) not later than 14 days before termi-
5
nating the contract or other agreement, pro-
6
vides notice to the covered entity of the termi-
7
nation.
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‘‘(2) APPEAL.—The Administrator shall estab-
9
lish a process for a covered entity to appeal a termi-
10
nation of a contract or other agreement under para-
11
graph (1).
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‘‘(3) EARLY TERMINATION PAYOUTS.—The Ad-
13
ministrator or a Write Your Own company is not re-
14
quired to make any early termination payout to a
15
covered entity with respect to a contract or agree-
16
ment with the Write Your Own company that the
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Administrator terminates under paragraph (1).’’.
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(b) EFFECTIVE DATE; APPLICABILITY.—The amend-
19
ment made by subsection (a) shall—
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(1) take effect on the date of enactment of this
21
Act; and
22
(2) apply to any contract or other agreement
23
between a covered entity and a Write Your Own
24
company (as those terms are defined in section
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•S 1039 IS
1349(a) of the National Flood Insurance Act of
1
1968, as added by subsection (a)) entered into on or
2
after the date of enactment of this Act.
3
Æ
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