With an impending expiration of the NFIP looming, the House and Senate passed NFIP reform legislation (the "Flood Insurance Reform and Modernization Act of 2012") on June 29 as part of a larger transportation funding bill (H.R. 4348). The law extends the NFIP through September 30, 2017 but also contains significant reforms to the NFIP which will take considerable time for FEMA and other Regulatory Agencies to implement.

Among many other reforms, the 2012 Reform Act will do the following:

• extend the NFIP until September 30, 2017
• authorize up to $400 million per year in appropriations to fund the flood mapping program for the next five years
• establish the Technical Mapping Advisory Council to guide FEMA's efforts to ensure that flood maps are useful for flood risk identification and floodplain management purposes (a flood determination industry representative will be part of the council)
• phase out subsidies for certain types of properties
• raise the cap on annual premium increases from 10 percent to 20 percent
• require FEMA to develop a plan for repaying the current debt within ten years
• introduce additional oversight and reporting requirements for FEMA related to WYO companies
• increase non-compliance penalties for lenders from $350 to $2,000 per violation and remove the annual maximum limit per institution
• require lenders, their regulators, Fannie Mae and Freddie Mac to accept private flood insurance policies that meet certain criteria
• require lenders to cancel force-placed policies (and refund related premiums) within 30 days of receipt of evidence of a borrower's voluntary policy
• require development of a formula to handle wind and water claims following a hurricane

You are encouraged to review and consider the provisions of H.R. 4348 and the possible implications. (The 2012 Reform Act can be found beginning of page 512 of the linked document).

The NFDA has worked over the last several years to encourage Congress to (i) pass a long-term extension of the NFIP, (ii) support FEMA's flood mapping program with sufficient funding, and (iii) not pass a law which includes any delay in the mandatory purchase of flood insurance provisions. Thus, the NFDA is pleased that the 2012 Reform Act is consistent with these 3 top priorities. Following the passage, the NFDA issued a media statement supporting Congress's action to pass a long-term extension of the NFIP and to show support for FEMA's flood mapping program.

Mark your calendar for the National Flood Determination's 16th Annual Conference March 24-26, 2013 in Scottsdale, AZ at the Scottsdale Plaza Resort.  More information will be forthcoming, including registration and program information.