National Dec 2, 2016

FEMA finalizes rule on removal of NFIP's financial assistance/subsidy arrangement

The Department of Homeland Security issued a Notice of Proposed Rulemaking concerning the potential removal of the National Flood Insurance Program's financial assistance/subsidy arrangement from the Federal Emergency Management Agency's regulations, in the spring.

FEMA published a Notice of Proposed Rulemaking that proposed to remove the NFIP's financial assistance/subsidy arrangement from its regulations on May 23, 2016. Under the proposal, FEMA would continue to enter into arrangements that were uniform among the different Write-Your-Own companies. However, FEMA would no longer publish the reference copy of the Arrangement in the Code of Federal Regulations, according to the proposal. Instead, FEMA would make the copy available on its website. In the proposal, FEMA said it believes the change would allow it and its industry partners greater flexibility to make operational adjustments and corrections to the arrangement more quickly and efficiently.

FEMA now is publishing a final rule that removes the arrangement and the Financial-Control Plan from the Code of Federal Regulations. And, in response to comments received by FEMA, the final rule now requires FEMA to publish the arrangement in the Federal Register at least six months prior to its effective date. FEMA believes this new requirement will ensure WYO companies have sufficient time to assess changes to the arrangement prior to committing to the upcoming arrangement year. This final rule does not make any substantive changes to the relationship between FEMA and WYO companies.