Title IV — Policyholder protection and fairness

S. 2187 · 116th Congress · Jul 18, 2019 · Lineage

IV Policyholder protection and fairness

Sec. 401 Earth movement fix and engineer standards

(a)

Rebuttable presumption for foundation and structural damage—

(1)

In general— Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019) is amended by adding at the end the following:

“(d) Rebuttable presumption for foundation and structural damage

“(1) In general—For the purposes of the Administrator determining coverage under the standard flood insurance policy under the national flood insurance program, a rebuttable presumption that physical damage to the foundation of, or structural damage to, a structure was not caused by earth movement shall apply if—

“(A) flood caused direct physical change to the structure; and

“(B) there is damage to the foundation of, or structural damage to, the structure that was not present before the flood, as demonstrated by a certification from the policyholder.

“(2) Rebuttal—In determining coverage as a result of the rebuttable presumption under paragraph (1), an insurance company may rebut the presumption only by providing the Administrator with an engineering report that—

“(A) meets standards issued by the Administrator under paragraph (3); and

“(B) clearly demonstrates that the physical damage to the foundation of, or structural damage to, a structure described in paragraph (1) was caused directly by earth movement that was not caused by—

“(i) the horizontal pressure from standing or slow-moving floodwater (commonly known as “hydrostatic pressure”);

“(ii) the force of floodwater that causes the vertical uplift from the underside of a horizontal foundation component, such as a concrete slab, footer, or a structural floor assembly (commonly known as “buoyancy”);

“(iii) pressure imposed on an object, such as a wall of a building, by high-velocity floodwater or waves flowing against and around the building (commonly known as “hydrodynamic force”);

“(iv) floodwater moving along the surface of the ground causing soil to suddenly erode or undermine, resulting in failure of a foundation or to one of the structural components of the foundation (commonly known as “scouring”); or

“(v) earth movement otherwise caused by flood.

“(3) In general—The Administrator shall issue minimum standards—

“(A) regarding the form and content of engineering reports used to assist insurance claims adjusters with respect to carrying out this subsection; and

“(B) which shall—

“(i) include a requirement that any such engineering report shall be signed and have a seal affixed by an engineer who is licensed in the State in which the property to which the claim relates is located; and

“(ii) be consistent with generally accepted practices in—

“(I) the field of forensic engineering; and

“(II) the insurance industry.

“(4) Rule of construction—Nothing in this subsection may be construed to modify the terms and conditions of the standard flood insurance policy.”

(2)

Application— The amendments made by paragraph (1) shall apply with respect to a claim with a date of loss that is on or after the date that is 90 days after the date of enactment of this Act.

(b)

Regulations— Not later than 90 days after the date of enactment of this Act, the Administrator shall issue the standards required under subsection (d)(3) of section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019), as added by subsection (a)(1).

Sec. 402 Coverage of pre-FIRM condominium basements and study on street raising

(a)

Basement clarification—

(1)

In general— Section 1305 of the National Flood Insurance Act of 1968 (42 U.S.C. 4012) is amended by adding at the end the following:

“(e) Availability of insurance for pre-FIRM condominium basements

“(1) Definition—In this subsection, the term pre-FIRM condominium building means a condominium building that was not constructed or substantially improved after the later of—

“(A) December 31, 1974; or

“(B) the effective date of the initial flood insurance rate map published by the Administrator under section 1360 for the area in which the building is located.

“(2) Coverage—The Administrator shall make flood insurance available to cover the basement of any pre-FIRM condominium building if that basement serves as a separate residential unit within that condominium building.”

(2)

Amendments to regulations— Not later than 180 days after the date of enactment of this Act, the Administrator shall make any amendments to the regulations of the Federal Emergency Management Agency that are necessary as a result of the amendment made by paragraph (1).

(b)

Study on consequences of street-Raising—

(1)

Definition— In this subsection, the term affected property means a property containing an area—

(A)

the floor of which was located at or above grade before the community raised the street adjacent to the property; and

(B)

after the street-raising described in subparagraph (A), that was designated as a basement because of the street-raising.

(2)

Study; report— Not later than 1 year after the date of enactment of this Act, the Administrator shall study and submit to Congress a report on the consequences of street-raising on flood insurance coverage for an affected property under the National Flood Insurance Program, including the cost implications for the property owner.

Sec. 403 Guidance on remediation and policyholder duties

(a)

In general— Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019), as amended by section 401(a)(1), is amended by adding at the end the following:

“(e) Guidance on mold remediation

“(1) In general—The Administrator shall issue guidance relating to the identification of reasonable actions that a policyholder of coverage for flood insurance made available under this title may take to inspect and maintain the property to which that coverage applies—

“(A) after a flood recedes; and

“(B) in order to avoid damage to the property that is caused by mold, mildew, moisture, or water.

“(2) Considerations—In developing guidance under paragraph (1), the Administrator shall consider—

“(A) any applicable laws and regulations;

“(B) the terms and conditions of the standard flood insurance policy;

“(C) technical best practices;

“(D) the costs of remediation in relation to the condition of a property described in that paragraph; and

“(E) the actions that the Administrator may reasonably expect a policyholder described in that paragraph to take, given the likely challenges faced by the policyholder after a flood.

“(3) Regular review—The Administrator shall—

“(A) regularly review the guidance issued under paragraph (1); and

“(B) revise the guidance issued under paragraph (1) as the Administrator determines appropriate.

“(4) Annual distribution—The Administrator shall provide a copy of the guidance issued under paragraph (1) to a policyholder at the time of the purchase or renewal of a flood insurance policy sold under this title.”

(b)

Initial issuance— Not later than 1 year after the date of enactment of this Act, the Administrator shall issue the guidance required under subsection (e) of section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019), as added by subsection (a) of this section.

(c)

Accessibility, reasonableness and degree of damage— Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019), as amended by subsection (a), is amended by adding at the end the following:

“(f) Exclusion of certain damage—For purposes of determining whether damage caused by mold, mildew, moisture, or water to a property shall be excluded from coverage under the standard flood insurance policy—

“(1) subject to paragraph (2), only the degree of damage caused by mold, mildew, moisture, or water that could have been avoided through inspection and maintenance may be excluded from that coverage; and

“(2) the condition of the property to which the damage relates may not be considered to be attributable to the policyholder with respect to the property, including any failure by the policyholder to inspect and maintain the property after a flood recedes, if—

“(A) the policyholder was denied access to the property after the flood receded because of—

“(i) a lawful government order;

“(ii) a determination by local authorities that the property—

“(I) is unsafe or unstable; or

“(II) shall be condemned; or

“(iii) otherwise unsafe conditions;

“(B) a reasonable individual exercising reasonable judgment could not be expected to inspect, maintain, or mitigate the damage to the property under the circumstances; or

“(C) the policyholder faced particular challenges, including—

“(i) practical or financial difficulty in inspecting or maintaining the property;

“(ii) the need to address other more immediate priorities, including—

“(I) the health and well-being of the policyholder and the family of the policyholder;

“(II) the preservation of basic items;

“(III) displacement; and

“(IV) other issues that make inspection and maintenance of the property a near-term challenge for the policyholder; and

“(iii) the unavailability of contractors or other individuals to perform any required inspection and maintenance.”

Sec. 404 Appeal of decisions relating to flood insurance coverage

(a)

In general— Section 205 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 note) is amended—

(1)

in the matter preceding paragraph (1), by striking “Not later” and inserting the following:

“(a) In general—Not later”

(2)

by adding at the end the following:

“(b) Deadline To file appeal—The Director shall establish a deadline for filing an appeal under this section that is not less than 1 year after the date on which the decision being appealed was made.

“(c) Notification upon initial denial of claim—The Director shall ensure that a claimant is provided with the rules, forms, and deadlines for an appeal under this section at the time a claim is first denied in full or in part, including—

“(1) the effective date of the denial;

“(2) a justification for the denial, including supporting documentation;

“(3) the date on which the period of limitation for instituting an action on the claim under section 1333 or 1341 of the National Flood Insurance Act of 1968 (42 U.S.C. 4053 and 4072), as applicable, will end; and

“(4) a point of contact through which the claimant can directly discuss an appeal with a representative of the Federal Emergency Management Agency.

“(d) Deadline To resolve appeal

“(1) In general—Not later than 90 days after the date on which a policyholder has submitted all necessary information relating to an appeal under this section, the Director shall provide an appeal decision in writing to the policyholder and insurer, including specific information for the resolution of the appeal.

“(2) Enforcement—If the Director does not comply with the deadline under paragraph (1) with respect to an appeal, and the policyholder that brought the appeal is ultimately successful, the Director shall pay to the policyholder interest on the claim that is the subject of the appeal, which shall—

“(A) begin accruing on the date on which the policyholder files the appeal; and

“(B) be calculated using the rate of return on a 3-year Treasury bill, as in effect on the date described in subparagraph (A).

“(3) Notification upon denial of appeal—If the Director denies an appeal filed by a policyholder under this section, the Director shall include with the notice of denial—

“(A) an explanation of the legal options of the policyholder for further challenging the denial; and

“(B) the date on which the period of limitation for instituting an action on the claim under section 1333 or 1341 of the National Flood Insurance Act of 1968 (42 U.S.C. 4053 and 4072), as applicable, will end.

“(e) Optional arbitration

“(1) In general—Not later than 180 days after the date of enactment of this subsection, the Director shall, by regulation, establish a process through which a flood insurance policyholder, instead of submitting an appeal under this section, may request that the appeal be heard through independent, binding arbitration.

“(2) Rule of construction—Nothing in paragraph (1) may be construed to—

“(A) require a policyholder to submit to the arbitration described in that paragraph; or

“(B) prevent a policyholder from obtaining judicial review of the results of the arbitration described in that paragraph.”

(b)

Relation to regulations and other law— Nothing in the amendments made by subsection (a) may be construed to require the Administrator to repeal the regulations promulgated under section 205 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 note), as in effect on the day before the date of enactment of this Act, or to promulgate new regulations, except as necessary to implement those amendments.

Sec. 405 Accountability for underpayments and overpayments by Write Your Own companies

Section 1348 of the National Flood Insurance Act of 1968 (42 U.S.C. 4084) is amended by adding at the end the following:

“(c) Accountability for underpayments—If the Administrator determines through any audit that the pool or an insurance company or other private organization described in subsection (a) has not adjusted a claim in accordance with adjusting standards that are in effect as of the date on which the adjustment is performed and, as a result of that failure, has underpaid or overpaid a claim of a policyholder, the penalty imposed by the Administrator with respect to such a failure may not be less for an overpayment of a claim than for an underpayment of a claim.

“(d) GAO report—Not later than 2 years after the date of enactment of this subsection, and triennially thereafter, the Comptroller General of the United States shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report regarding any fines or other penalties imposed by the Administrator under subsection (c).”

Sec. 406 Policyholders’ right to know

(a)

Use— Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019), as amended by section 403(c), is amended by adding at the end the following:

“(g) Use of technical assistance reports—When adjusting claims for any damage to or loss of property that is covered by flood insurance made available under this title, the Administrator may rely upon technical assistance reports, as defined in section 1312A(a), only if the reports are final and are prepared in compliance with applicable State and Federal laws regarding professional licensure and conduct.”

(b)

Disclosure— Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 4011 et seq.) is amended by inserting after section 1312 (42 U.S.C. 4019) the following:

“1312A. Disclosure of claims documents and technical assistance reports

“(a) Definitions—In this section—

“(1) the term policyholder means any person listed as a named or additional insured on the declarations page of a policy for flood insurance coverage made available under this title; and

“(2) the term technical assistance report means a report created for the purpose of furnishing technical assistance to an insurance claims adjuster assigned under the national flood insurance program, including any report created by an engineer, a surveyor, a salvor, an architect, or a certified public accountant.

“(b) Provision of copies

“(1) In general—Notwithstanding section 552a of title 5, United States Code, not later than 1 week after the date on which the Administrator receives a written request, or a request submitted online, from a policyholder, and with respect to a claim for loss submitted by the policyholder for any damage to or loss of property that is covered by the policy, the Administrator shall provide a true, complete, and unredacted copy of—

“(A) all documents that constitute the claims file of the insurance company with respect to the claim;

“(B) any document created by any adjuster in scoping the loss, including measurements, photographs, and notes;

“(C) any estimates of damages with respect to the claim;

“(D) any draft and final technical assistance report relating to adjusting and paying or denying the claim;

“(E) any proof of loss, supplemental proofs of loss, or any equivalent notices, together with supporting documentation, with respect to the claim; and

“(F) any document relating to the denial or partial denial of the claim.

“(2) Rule of construction—Nothing in paragraph (1) may be construed to limit the right of a policyholder to receive a disclosure under section 552a of title 5, United States Code, or any other provision of law.

“(c) Direct disclosure by Write Your Own companies and direct servicing agents

“(1) In general—A Write Your Own company or direct servicing agent in possession of any technical assistance report that is subject to disclosure under subsection (b) may disclose such technical assistance report without further review or approval by the Administrator.

“(2) Affirmative notification—A Write Your Own company, or any other entity servicing a claim under the national flood insurance program, shall, not later than 30 days after the date on which the company or entity receives notice of a claim, notify the claimant that the claimant or an authorized representative of the claimant may obtain, upon request, a copy of any claim-related document described in subsection (b)(1) that pertains to the claimant.”

(c)

Transmission of report without approval—

(1)

Definition— In this subsection, the term final engineering report means an engineering report, survey, or other document in connection with a claim for losses covered by a policy for flood insurance coverage made available under the National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.) that—

(A)

is based on an on-site inspection;

(B)

contains final conclusions with respect to an engineering issue or issues involved in the claim; and

(C)

is signed by the responsible in charge or affixed with the seal of the responsible in charge, or both.

(2)

Transmission— A Write Your Own company or a National Flood Insurance Program direct servicer may, without obtaining further review or approval by the Administrator, transmit to a policyholder a final engineering report in the possession of the Write Your Own company or the direct servicer in connection with a claim submitted by the policyholder.

Sec. 407 Increasing statute of limitations for lawsuits

(a)

Government program with industry assistance— Section 1341 of the National Flood Insurance Act of 1968 (42 U.S.C. 4072) is amended to read as follows:

“1341. Adjustment and payment of claims and judicial review

“(a) Adjustment and payment of claims—If the program is carried out as provided in section 1340, the Administrator may adjust and make payment of any claims for proved and approved losses covered by flood insurance made available under this title.

“(b) Judicial review

“(1) Right of action—Upon the denial or partial denial by the Administrator of a claim described in subsection (a), or upon the refusal of a policyholder to accept the amount allowed upon a claim described in that subsection, the policyholder may institute an action against the Administrator on the claim in the United States district court for the district in which the insured property or the major part thereof shall have been situated if filed not later than 2 years after the date on which the policyholder receives notice of denial or partial denial of the claim.

“(2) Tolling—In the case of a denial or partial denial of a claim for losses that is appealed under section 205 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (42 U.S.C. 4011 note), including through arbitration requested under subsection (e) of that section, the limitation to institute an action under this subsection shall be tolled until the date on which the policyholder receives notice of a final determination of that appeal or arbitration denying the claim in whole or in part.

“(3) Jurisdiction—A court described in paragraph (1) shall have original exclusive jurisdiction to hear and determine an action under that paragraph without regard to the amount in controversy.”

(b)

Industry program with federal financial assistance— Section 1333 of the National Flood Insurance Act of 1968 (42 U.S.C. 4053) is amended to read as follows:

“1333. Adjustment and payment of claims and judicial review

“(a) Adjustment and payment of claims—The insurance companies and other insurers that form, associate, or otherwise join together in the pool under this part may adjust and pay all claims for proved and approved losses covered by flood insurance in accordance with the provisions of this title.

“(b) Judicial review

“(1) Right of action—Upon the denial or partial denial by any company or other insurer described in subsection (a) of a claim described in that subsection, or upon the refusal of a policyholder to accept the amount allowed upon a claim described in that subsection, the policyholder may institute an action on the claim against the company or other insurer, as applicable, in the United States district court for the district in which the insured property or the major part thereof shall have been situated not later than 2 years after the date on which the policyholder receives notice of denial or partial denial of the claim.

Sec. 408 Authority to terminate contractors and vendors

(a)

In general— Part C of chapter II of the National Flood Insurance Act of 1968 (42 U.S.C. 4081 et seq.) is amended by adding at the end the following:

“1349. Termination of contracts

“(a) Definition—In this section, the term covered entity means any attorney, law firm, consultant, or third-party company that provides services to a Write Your Own company.

“(b) Termination

“(1) In general—Notwithstanding any other provision of law, the Administrator may direct a Write Your Own company to terminate a contract or other agreement between a covered entity and the Write Your Own company if the Administrator—

“(A) determines that the covered entity has engaged in conduct that is detrimental to the national flood insurance program; and

“(B) not later than 14 days before directing the termination of the contract or other agreement, provided notice to the covered entity and the Write Your Own company with respect to the termination.

“(2) Appeal—The Administrator shall establish a process for a covered entity to appeal the termination of a contract or other agreement under paragraph (1).

“(3) Early termination payouts—The Administrator or a Write Your Own company is not required to make any early termination payout to a covered entity with respect to a contract or agreement with the Write Your Own company with respect to which the Administrator directs termination under paragraph (1).

“(4) Contract terms—The Administrator shall require each Write Your Own company to include a reference to the authority of the Administrator under this section in any contract between a covered entity and the Write Your Own company.”

(b)

Effective date; applicability— The amendment made by subsection (a) shall apply to any contract or other agreement between a covered entity, as defined in section 1349(a) of the National Flood Insurance Act of 1968, as added by subsection (a), and a Write Your Own company that is entered into on or after the date of enactment of this Act.

Sec. 409 Easing proof of loss requirements

Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019), as amended by section 406(a), is amended by adding at the end the following:

“(h) Proof of loss

“(1) Deadline for submission of supplemental proof of loss—If a policyholder submits a proof of loss, or an equivalent submission, for a claim with respect to a policy for flood insurance coverage made available under this title by the deadline required under the standard flood insurance policy, the Administrator may not deny payment for any supplemental proof of loss submitted for flood damage sustained from the same flood event on the basis that the policyholder failed to include the flood damages on the initial proof of loss.

“(2) Effect of signature on proof of loss—If a policyholder of a policy for flood insurance coverage made available under this title signs an initial or supplemental proof of loss described in paragraph (1), that act of signing may not preclude the policyholder from making supplemental claims to, or otherwise amending, the initial proof of loss.

“(i) No condition of payment—Notwithstanding any other provision of law, or any term or condition of a standard flood insurance policy, the Administrator may not condition payment of an undisputed claim based on the submission of a signed and sworn to proof of loss.”

Sec. 410 Deadline for claim processing

(a)

In general— Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019), as amended by section 409, is amended by adding at the end the following:

“(j) Deadline for approval of claims

“(1) In general—The Administrator shall provide that, in the case of a claim for damage to or loss of property that is covered by a policy for flood insurance made available under this title—

“(A) except as provided in paragraph (2), not later than 60 days after the date on which a proof of loss or comparable submission is provided to the Administrator—

“(i) an initial determination regarding approval of the claim for payment or disapproval of the claim shall be made; and

“(ii) notification of the determination described in clause (i) shall be provided to the policyholder making the claim; and

“(B) payment of an approved claim shall be made as soon as possible after that approval.

“(2) Extension of deadline—The Administrator shall—

“(A) provide that the period described in paragraph (1)(A) may be extended by an additional period of 30 days under extraordinary circumstances; and

“(B) by regulation—

“(i) establish criteria for—

“(I) demonstrating the extraordinary circumstances described in subparagraph (A); and

“(II) determining to which claims the extraordinary circumstances described in subparagraph (A) apply; and

“(ii) provide that, if the deadline imposed under paragraph (1)(A), as extended under subparagraph (A), if applicable, is not satisfied, the amount of the claim to which the deadline relates shall be increased with interest, which shall begin accruing on the date on which the initial claim is filed.”

(b)

Applicability— The amendment made by subsection (a) shall apply to any claim for damage to or loss of property that is covered by a policy for flood insurance made available under the National Flood Insurance Program that is made after the date of enactment of this Act.

Sec. 411 No manipulation of engineer reports

Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019), as amended by section 410(a), is amended by adding at the end the following:

“(k) Final engineering reports

“(1) Definitions—In this subsection—

“(A) the term covered claim means any claim for losses covered by a policy for flood insurance coverage made available under this title; and

“(B) the term final engineering report means an engineering report, survey, or other document in connection with a covered claim that—

“(i) is based on an on-site inspection;

“(ii) contains final conclusions with respect to an engineering issue or issues involved in the claim; and

“(iii) is signed by the responsible in charge or affixed with the seal of the responsible in charge, or both.

“(2) Prohibition on manipulation and transmission to third parties—The Administrator shall require that, in the case of any on-site inspection of a property by an engineer for the purpose of assessing any covered claim, the final engineering report—

“(A) may not—

“(i) include alterations by, or at the request of, anyone other than the person responsible for the report; or

“(ii) be transmitted to any other person before the final engineering report is transmitted to the policyholder who submitted the covered claim; and

“(B) shall include a certification, signed by the person responsible for the final engineering report, that the final engineering report does not contain any alterations described in subparagraph (A).”

Sec. 412 Improved training of floodplain managers, agents, and adjusters

(a)

Local floodplain managers— Each regional office of the Federal Emergency Management Agency shall—

(1)

provide training to local floodplain managers, agents, and claim adjusters in the region regarding the responsibilities and procedures of local floodplain managers with respect to conducting substantial damage and substantial improvement determinations;

(2)

work with applicable State agencies to provide the training described in paragraph (1); and

(3)

verify that the individuals described in paragraph (1) are completing the training described in that paragraph.

(b)

Major disaster training— After a flood that is declared a major disaster by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170), the Administrator shall, if determined appropriate, provide—

(1)

refresher training to prepare insurance claims adjusters for the unique circumstances of the major disaster; and

(2)

any briefings that are necessary to prepare and inform floodplain managers, agents, and claim adjusters regarding any atypical circumstances and issues arising from the natural disaster.

Sec. 413 Attorney fee shifting

(a)

Administrative appeals— Subsection (d) of section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019), as added by section 401(a)(1), is amended by adding at the end the following:

“(5) Awards for costs in administrative proceedings

“(A) In general—If the claimant prevails in any appeal to the Administrator of the disallowance or partial disallowance of a claim for losses covered by flood insurance made available under this title, the Administrator shall award costs of the appeal, including attorney fees, any proceeding expenses, and engineering and other expert expenses, to the claimant.

“(B) Definition—For purposes of this paragraph, the term prevail means to be awarded a greater amount by the Administrator than the amount of the last, best offer from the Administrator with respect to the claim of the claimant.”

(b)

Judicial review—

(1)

Government program with industry assistance— Subsection (b) of section 1341 of the National Flood Insurance Act of 1968 (42 U.S.C. 4072), as added by section 407(a), is amended by adding at the end the following:

“(4) Attorney fees and other litigation costs

“(A) In general—If the claimant prevails in an action under this subsection, the court shall award reasonable costs of litigation, including attorney fees, litigation expenses, and engineering and other expert expenses, to the claimant.

“(B) Subrogation—Any award under subparagraph (A) shall be paid by the Administrator and, upon such payment, the Administrator shall be subrogated to the rights of the claimant to recover such costs for which the Administrator has compensated the claimant from any insurance company or other insurer or insurance adjustment organization that may be responsible for the disallowance or partial disallowance of the claim.

“(C) Definition—For purposes of this paragraph, the term prevail means to be awarded a greater amount by the court than the amount of the last, best offer from the Administrator with respect to the claim of the claimant.”

(2)

Industry program with Federal financial assistance— Subsection (b) of section 1333 of the National Flood Insurance Act of 1968 (42 U.S.C. 4053), as amended by section 407(b), is amended by adding at the end the following:

“(4) Attorney fees and other litigation costs

“(B) Subrogation—Any award under subparagraph (A) shall be paid by the Administrator and, upon such payment, the Administrator shall be subrogated to the rights of the claimant to recover such costs for which the Administrator has compensated the claimant from any company or other insurer responsible for the disallowance or partial disallowance of the claim.

“(C) Definition—For purposes of this paragraph, the term prevail means to be awarded a greater amount by the court than the amount of the last, best offer from the insurer or Administrator with respect to the claim of the claimant.”

Sec. 414 DOJ defense against policyholder lawsuits

Subsection (b) of section 1341 of the National Flood Insurance Act of 1968 (42 U.S.C. 4072), as amended by section 413(b)(1), is amended by adding at the end the following:

“(5) Representation by Department of Justice—If a claimant institutes an action under this subsection—

“(A) the Administrator shall refer the matter to the Attorney General; and

“(B) the Attorney General—

“(i) shall represent the Administrator or the Write Your Own company, as applicable, in the action; and

“(ii) may not seek to have the court dismiss an action with potentially meritorious claims based on good faith errors or omissions by the claimant in the claimant's proof of loss.”

Sec. 415 Pilot program for pre-existing structural conditions

(a)

Definitions— In this section—

(1)

the term covered property means a property that is or may be covered by flood insurance under the National Flood Insurance Program; and

(2)

the term covered policyholder means a policyholder or potential policyholder of flood insurance under the National Flood Insurance Program for a covered property.

(b)

Pilot program— Not later than 180 days after the date of enactment of this Act, the Administrator shall establish a pilot program under which Write Your Own companies and National Flood Insurance Program direct servicers shall, at the request of a covered policyholder and before providing or renewing insurance coverage with respect to a covered property under the National Flood Insurance Program, investigate the pre-existing structural condition of the covered property for any issues that could result in the denial of a claim under the National Flood Insurance Program for damage to or loss of the covered property.

Sec. 416 Agent Advisory Council

Part C of chapter II of the National Flood Insurance Act of 1968 (42 U.S.C. 4081 et seq.), as amended by section 408, is amended by adding at the end the following:

“1350. Agent Advisory Council

“(a) Establishment—There is established a council to be known as the Agent Advisory Council (in this section referred to as the Council).

“(b) Membership

“(1) Members—The Council shall consist of—

“(A) the Administrator, or the designee of the Administrator; and

“(B) 10 additional members appointed by the Administrator or the designee of the Administrator, of whom—

“(i) 1 shall be a member of the National Association of Insurance Commissioners;

“(ii) 2 shall be members of the Independent Insurance Agents and Brokers of America;

“(iii) 1 shall be a member of United Policyholders;

“(iv) 1 shall be a representative of the Emergency Management Institute of the Federal Emergency Management Agency;

“(v) 1 shall be a representative of the Office of the Flood Insurance Advocate of the Federal Emergency Management Agency;

“(vi) 2 shall be members of the National Association of Professional Insurance Agents;

“(vii) 1 shall be a representative of a recognized professional association or organization representing homebuilders or land developers; and

“(viii) 1 shall be a representative of a recognized professional association or organization representing the real estate industry.

“(2) Qualifications

“(A) In general—Each member of the Council shall have experience with—

“(i) contacting policyholders under the national flood insurance program, including with respect to applying for flood insurance and processing a claim for damage to or loss of property that is covered by flood insurance; and

“(ii) riverine and coastal flood insurance policies.

“(B) Considerations—The Administrator shall, to the maximum extent practicable, ensure that the membership of the Council has a balance of governmental and private members, and includes geographic diversity.

“(C) Conflicts of interest—A member of the Council—

“(i) may not, while serving on the Council, be employed or retained—

“(I) by a Federal Emergency Management Agency contractor or consultant; or

“(II) by a nongovernmental entity that was awarded a Federal grant during the 5-year period preceding the date on which the member was appointed to the Council; and

“(ii) may not have been employed by a Federal Emergency Management Agency contractor or consultant during the 5-year period preceding the date on which the member was appointed to the Council.

“(3) Consultation—In appointing a member of the Council from an entity described in clauses (i) through (viii) of paragraph (1)(B), the Administrator or the designee of the Administrator, as applicable, shall consult with the entity.

“(4) Chairperson—The members of the Council shall elect 1 member to serve as the chairperson of the Council (in this section referred to as the “Chairperson”).

“(c) Duties—The Council shall—

“(1) provide recommendations to the Administrator on—

“(A) improving the customer experience for policyholders under the national flood insurance program;

“(B) training insurance agents that issue flood insurance policies; and

“(C) improving the processing and handling of claims for damage to or loss of property that is covered by flood insurance; and

“(2) submit to the Administrator an annual report that includes—

“(A) a description of the activities of the Council; and

“(B) a summary of recommendations made by the Council to the Administrator.

“(d) Compensation

“(1) In general—Except as provided in paragraph (2), a member of the Council shall receive no additional compensation for serving on the Council.

“(2) Travel expenses—Each member of the Council may be allowed travel expenses, including per diem in lieu of subsistence, in accordance with sections 5702 and 5703 of title 5, United States Code, while away from their homes or regular places of business in performance of services for the Council.

“(e) Meetings and actions

“(1) Meetings

“(A) In general—The Council shall meet not less frequently than twice each year at the request of the Chairperson or a majority of the members of the Council.

“(B) Initial meeting—The Administrator, or a designee of the Administrator, shall request and coordinate the initial meeting of the Council.

“(2) Action by majority vote—The Council may take action by a vote of the majority of the members.

“(f) Officers—The Chairperson may appoint officers to assist in carrying out the duties of the Council under subsection (c).

“(g) Staff—Upon the request of the Chairperson, the Administrator may detail, on a nonreimbursable basis, personnel of the Office of the Flood Insurance Advocate of the Federal Emergency Management Agency to assist the Council in carrying out the duties of the Council.

“(h) Powers—In carrying out this section, the Council may hold hearings, receive evidence and assistance, provide information, and conduct research as the Council considers appropriate.

“(i) Report to Congress and OMB—The Administrator shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Financial Services of the House of Representatives, and the Director of the Office of Management and Budget an annual report on—

“(1) the recommendations made by the Council; and

“(2) any recommendations made by the Council during the year covered by the report that, as of the date on which the report is submitted, have been deferred or not acted upon, together with an explanatory statement with respect to those recommendations.

“(j) Applicability of the Federal Advisory Committee Act—Section 14 of the Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the Council.”

Sec. 417 Disclosure of flood risk information upon transfer of property

(a)

In general— Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 4011 et seq.), as amended by section 207, is amended by adding at the end the following:

“1328. Disclosure of flood risk information upon transfer of property

“(a) In general—After September 30, 2022, no new flood insurance coverage may be provided under this title for any real property unless an appropriate public body has imposed, by statute or regulation, a duty on any seller or lessor of improved real estate to provide to any purchaser or lessee (with respect to a lease for a term that is not shorter than 30 days) of the property a property flood hazard disclosure that the Administrator has determined meets the requirements of subsection (b).

“(b) Disclosure requirements

“(1) Requirements for sellers—A property flood hazard disclosure for the sale of a property shall meet the requirements of this subsection only if the disclosure—

“(A) is made in writing;

“(B) discloses any actual knowledge of the seller of any—

“(i) prior physical damage caused by flood to a structure located on the property;

“(ii) prior insurance claim for a loss covered under the national flood insurance program or private flood insurance with respect to the property;

“(iii) previous notification regarding the designation of the property as a repetitive loss structure or severe repetitive loss structure (as defined in section 1366(h)); and

“(iv) Federal legal obligation to obtain and maintain flood insurance running with the property; and

“(C) is delivered by, or on behalf of, the seller to the purchaser before the purchaser becomes obligated under any contract to purchase the property.

“(2) Requirements for lessors—A property flood hazard disclosure for a rental property with a lease for a term that is not shorter than 30 days shall meet the requirements of this subsection only if the disclosure—

“(A) is made in writing;

“(B) discloses any actual knowledge of the lessor—

“(i) of any Federal legal obligation to obtain and maintain flood insurance running with the property;

“(ii) regarding any prior physical damage caused by flood with respect to the unit being leased; and

“(iii) of the availability of coverage under this title for contents located in a structure on the property; and

“(C) is delivered by, or on behalf of, the lessor to the lessee before the lessee becomes obligated under any contract to lease the property.

“(3) Rule of construction—Nothing in this section may be construed as preventing a State from adopting disclosure requirements in addition to the requirements of this section.”

(b)

Availability of flood insurance coverage— Section 1305(c) of the National Flood Insurance Act of 1968 (42 U.S.C. 4012(c)) is amended—

(1)

in paragraph (1), by striking “, and” at the end and inserting a semicolon;

(2)

in paragraph (2), by striking the period at the end and inserting “; and”; and

(3)