Recommendation: The Administrator of FEMA should assess different approaches, in addition to community assistance visits, for using existing resources to ensure communities' compliance with NFIP requirements. This should include analyzing alternatives to community assistance visits. (Recommendation 1)

Agency: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Administrator of FEMA should identify appropriate steps to ensure it has complete, up-to-date, and reliable records of community assistance visits, including information on why some visit records remain open for a significant period of time. (Recommendation 2)

Agency: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Administrator of FEMA should ensure that communities are consistently collecting data on their substantial damage assessments and that FEMA has a way to readily access those data to evaluate community compliance with NFIP requirements for rebuilding substantially damaged properties. (Recommendation 3)

Agency: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Administrator of FEMA should clarify with NFIP communities its policies on sharing data on NFIP claims and provide such information to those communities as needed. (Recommendation 4)

Agency: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Director of the Federal Insurance Office should publicly communicate information about when it is considering certifying an event as an act of terrorism under TRIA. (Recommendation 1)

Agency: Department of the Treasury: Office of the Under Secretary for Domestic Finance: Office of the Assistant Secretary for Financial Institutions: Office of Financial Institutions Policy: Federal Insurance Office
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Director of the Federal Insurance Office should document an agreement with DHS about DHS's role, and how the agencies share information, during the process of certifying an event as an act of terrorism under TRIA. (Recommendation 2)

Agency: Department of the Treasury: Office of the Under Secretary for Domestic Finance: Office of the Assistant Secretary for Financial Institutions: Office of Financial Institutions Policy: Federal Insurance Office
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Director of the Federal Insurance Office should document an agreement with DOJ about DOJ's role, and how the agencies share information, during the process of certifying an event as an act of terrorism under TRIA. (Recommendation 3)

Agency: Department of the Treasury: Office of the Under Secretary for Domestic Finance: Office of the Assistant Secretary for Financial Institutions: Office of Financial Institutions Policy: Federal Insurance Office
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Director of the Federal Insurance Office should communicate to insurers in writing how it would utilize policyholder retention amounts in calculating "insurance losses" and "insured losses" in determining the program certification threshold, trigger, and cap, as applicable. (Recommendation 1)

Agency: Department of the Treasury: Office of the Under Secretary for Domestic Finance: Office of the Assistant Secretary for Financial Institutions: Office of Financial Institutions Policy: Federal Insurance Office
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Director of the Office of Workers' Compensation Programs should develop and implement procedures for coal mine operator self-insurance renewal that clarifies how long an operator is authorized to self-insure; when an operator must submit its renewal application and supporting documentation; and the conditions under which an operator's self-insurance authority would not be renewed. (Recommendation 1)

Agency: Department of Labor: Office of Workers' Compensation Programs
Status: Open

Comments: DOL agreed with this recommendation and said it is acting to implement it to achieve further improvements in ensuring the effective oversight of coal mine operator insurance. DOL reported that it would ensure letters granting or renewing self-insurance authority will inform operators that their authorization expires in one year and that they must submit renewal information three months in advance of the expiration date.

Recommendation: The Director of the Office of Workers' Compensation Programs should develop and implement procedures for self-insured coal mine operator appeals that identify time lines for self-insured operators to submit documentation supporting their appeals and that identify a goal for how much time DOL should take to make appeals decisions. (Recommendation 2)

Agency: Department of Labor: Office of Workers' Compensation Programs
Status: Open

Comments: DOL agreed with this recommendation and said it is acting to implement it to achieve further improvements in ensuring the effective oversight of coal mine operator insurance. DOL reported that it will ensure letters denying self-insurance will inform operators that they have a 30-day appeal period (limited to one extension) and that DOL has set a goal of resolving all appeals within 90 days of the denial letter.

Recommendation: The Director of the Office of Workers' Compensation Programs should develop and implement a process to monitor operator compliance with commercial insurance requirements and periodically evaluate the effectiveness of this process. This process should be designed to detect errors and omissions in reporting insurance coverage using complete, accurate, and consistently recorded data. (Recommendation 3)

Agency: Department of Labor: Office of Workers' Compensation Programs
Status: Open

Comments: DOL agreed with this recommendation and said it is acting to implement it to achieve further improvements in ensuring the effective oversight of coal mine operator insurance. DOL reported that it will modify existing computer systems to identify lapses or cancellations of commercial insurance coverage, and require operators identified as having lapsed or cancelled coverage to obtain or provide proof of coverage within 30 days.

Recommendation: The Secretary of Labor should systematically collect sufficient information on state profiling systems, possibly through DOL's new UI state self-assessment process, to identify states at risk of poor profiling system performance. For instance, DOL could collect information on challenges states have experienced using and maintaining their profiling systems, planned changes to the systems, or state processes for assessing the systems' performance. (Recommendation 1)

Agency: Department of Labor
Status: Open

Comments: The Department of Labor agreed with this recommendation and said it would take action to address it. In June 2020, DOL reported that agency staff and a contractor had made significant progress in implementing plans to revise the self-assessment tool. First, staff and the contractor gathered feedback and recommendations for improvements to the tool through focus group sessions with states in each region. DOL also reported that the contractor has been developing revised questions for inclusion in the updated self-assessment tool. While agency work on the project was temporarily halted due to the agency's focus on issuing guidance and providing technical assistance to states concerning various new UI programs of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (Pub. L. 116-136), officials said the contract has been extended to November 2020, and staff plan to resume work on the project soon. GAO will monitor the agency's progress and update the status of this recommendation, as appropriate.

Recommendation: The Secretary of Labor should develop a process to use information on state risks of poor profiling system performance to provide technical assistance to states that need to improve their systems. DOL may also wish to tailor its technical assistance based on state service delivery goals and technical capacity. (Recommendation 2)

Agency: Department of Labor
Status: Open

Comments: The Department of Labor agreed with this recommendation and said it would take action to address it. In June 2020, DOL said that it was committed to using the information collected by the new self-assessment tool to develop standard operating procedures for capturing and maintaining the profiling assessment tracking information. These activities are dependent on the revisions to the self-assessment tool discussed in DOL's update for recommendation 1. We will monitor the agency's progress and update this recommendation as appropriate.

Recommendation: The Secretary of Labor should update agency guidance to ensure that it clearly informs states about the range of allowable profiling approaches. (Recommendation 3)

Agency: Department of Labor
Status: Open

Comments: The Department of Labor agreed with this recommendation and committed to publishing an Unemployment Insurance Program Letter (UIPL) regarding the implementation and maintenance of acceptable state profiling systems. In June 2020, DOL reported that efforts to develop the UIPL had been delayed, due in part to the intersection of the Worker Profiling and Reemployment Services (WPRS) program and the now permanent Reemployment Services and Eligibility Assessments (RESEA) program. Agency officials said they remain committed to publishing the UIPL and noted that they were developing an analysis of statistical modeling approaches that states can consider using and providing a framework for a simplified and low-cost approach to testing these different modeling techniques using their own state data. While agency officials said they were not able to devote the needed time to completing the UIPL due to the impact of the COVID-19 pandemic on the UI program, officials said their goal was to publish the UIPL by the end of 2020. We will monitor the agency's progress in implementing this recommendation, and update its status, as appropriate.

Recommendation: The Assistant Secretary of DOL's Employment and Training Administration should provide states with information about its determination that the use of state formal warning policies is no longer permissible under federal law. (Recommendation 1)

Agency: Department of Labor
Status: Open
Priority recommendation

Comments: DOL agreed with this recommendation. The agency stated that it would take action to provide states with information about its determination that the use of state formal warning policies is no longer permissible under federal law. As of December 2019, DOL reported that it is developing new guidance that states can no longer use formal warnings. We will consider closing this recommendation when the agency completes this effort.

Recommendation: The Assistant Secretary of DOL's Employment and Training Administration should monitor states' efforts to discontinue the use of formal warning policies. (Recommendation 2)

Agency: Department of Labor
Status: Open

Comments: DOL agreed with this recommendation and stated that it would monitor states' efforts to discontinue the use of formal warning policies. In December 2019, DOL reported that it has been developing new guidance that more explicitly informs states that formal warning policies are not permissible. We will consider closing this recommendation when the agency completes this effort and monitors states' compliance with the guidance.

Recommendation: The Assistant Secretary of DOL's Employment and Training Administration should clarify information on work search verification requirements in its revised Benefit Accuracy Measurement procedures. The revised procedures should include an explanation of what DOL considers to be sufficient verification of claimants' work search activities. (Recommendation 3)

Agency: Department of Labor
Status: Open
Priority recommendation

Comments: DOL agreed with this recommendation and stated that it would clarify information on work search verification requirements in its revised Benefit Accuracy Measurement procedures. In December 2019, DOL reported that it is developing new guidance with instructions to clarify work search verification requirements. To fully implement this recommendation, DOL should finalize and publish these instructions on verifying claimants' work search activities and provide the clear directions to states.

Recommendation: The Assistant Secretary of DOL's Employment and Training Administration should monitor states' compliance with the clarified work search verification requirements. (Recommendation 4)

Agency: Department of Labor
Status: Open

Comments: DOL agreed with this recommendation and stated that it would monitor states' compliance with clarified work search verification requirements. In December 2019, DOL reported that it is working with the Office of Management and Budget on its draft work search guidance that will more explicitly inform states that formal warning policies are not permissible. We will close this recommendation when DOL publishes these instructions, providing states with clear directions, and monitors their compliance with the guidance.

Recommendation: The FAA Administrator should fulfill the CSLCA mandate to include ensuring a balance of risk between the federal government and launch companies as part of FAA's MPL methodology evaluation by reexamining the current probability thresholds. (Recommendation 1)

Agency: Department of Transportation: Federal Aviation Administration
Status: Open

Comments: In March 2020 Department of Transportation (DOT) officials stated that FAA had not yet finished reexamining the current maximum probable loss (MPL) probability thresholds or completed a subsequent rulemaking to address the probability thresholds. The officials also stated that FAA's focus for the prior two years has been on streamlining the launch and reentry license regulations (SLR2) rulemaking in response to the President's Space Policy Directive 2, which contains the National Space Council's recommendations for commercial space regulatory reform. According to the officials, this effort will continue through 2020, and that after it is completed, FAA will evaluate whether to begin a new rulemaking to address MPL analyses.

Recommendation: The FAA Administrator should fulfill the CSLCA mandate to analyze the cost impact of implementing its revised MPL methodology by evaluating the impact on the direct costs of launch companies and the federal government. (Recommendation 2)

Agency: Department of Transportation: Federal Aviation Administration
Status: Open

Comments: In March 2020, Department of Transportation (DOT) officials stated that FAA had not yet finished reexamining the current maximum probable loss (MPL) probability thresholds or completed a subsequent rulemaking to address the probability thresholds. The officials also stated that FAA's focus for the prior two years has been on streamlining the launch and reentry license regulations (SLR2) rulemaking in response to the President's Space Policy Directive 2, which contains the National Space Council's recommendations for commercial space regulatory reform. According to the officials, this effort will continue through 2020, and that after it is completed, FAA will evaluate whether to begin a new rulemaking to address MPL analyses.

Recommendation: The FAA Administrator should fulfill the CSLCA mandate to evaluate its MPL methodology in consultation with the commercial space sector and insurance providers by consulting with those entities on the cost impact of its revised MPL methodology, including an updated cost-of-casualty amount, on the launch industry and the federal government. (Recommendation 3)

Agency: Department of Transportation: Federal Aviation Administration
Status: Open

Comments: In March 2020, Department of Transportation (DOT) officials stated that FAA had not yet finished reexamining the current maximum probable loss (MPL) probability thresholds or completed a subsequent rulemaking to address the probability thresholds. The officials also stated that FAA's focus for the prior two years has been on streamlining the launch and reentry license regulations (SLR2) rulemaking in response to the President's Space Policy Directive 2, which contains the National Space Council's recommendations for commercial space regulatory reform. According to the officials, this effort will continue through 2020, and that after it is completed, FAA will evaluate whether to begin a new rulemaking to address MPL analyses.

Recommendation: The FAA Administrator should establish an estimated completion date for developing and implementing a plan to establish guidance on the most appropriate MPL methodologies and tools to use for each launch. (Recommendation 4)

Agency: Department of Transportation: Federal Aviation Administration
Status: Open

Comments: In March 2020, Department of Transportation (DOT) officials stated that FAA had not yet finished reexamining the current maximum probable loss (MPL) probability thresholds or completed a subsequent rulemaking to address the probability thresholds. The officials also stated that FAA's focus for the prior two years has been on streamlining the launch and reentry license regulations (SLR2) rulemaking in response to the President's Space Policy Directive 2, which contains the National Space Council's recommendations for commercial space regulatory reform. According to the officials, this effort will continue through 2020, and that after it is completed, FAA will evaluate whether to begin a new rulemaking to address MPL analyses.

Recommendation: As Congress considers reauthorizing NFIP, it should consider comprehensive reform to improve the program's solvency and enhance the nation's resilience to flood risk, which could include actions in six areas: (1) addressing the current debt, (2) removing existing legislative barriers to FEMA's revising premium rates to reflect the full risk of loss, (3) addressing affordability, (4) increasing consumer participation, (5) removing barriers to private-sector involvement, and (6) protecting NFIP flood resilience efforts. In implementing these reforms, Congress should consider the sequence of the actions and their interaction with each other.

Agency: Congress
Status: Open

Comments: As of July 2020, Congress has not passed comprehensive reform of NFIP, but Congress is considering various reforms as it works to reauthorize the program. We will review the status of this item if and when such legislation passes.

Recommendation: To help ensure that the government is not exposed to more liability risk than intended, the Secretary of Transportation should ensure that the FAA Administrator prioritizes the development of a plan to address the identified weakness in the cost-of-casualty amount, including setting time frames for action, and update the amount based on current information.

Agency: Department of Transportation
Status: Open

Comments: The Department of Transportation agreed with the recommendation. In March 2018, the Federal Aviation Administration (FAA) stated that the agency planned to conduct a rulemaking to address any updates to the cost-of-casualty amount. As part of the rulemaking, FAA planned to engage with the commercial space and insurance industries to obtain views on an appropriate cost-of-casualty amount and implications of any changes. However, in February 2019, FAA stated that it has been unable to conduct the planned rulemaking due to a competing priority that will continue through 2020. FAA has requested input from the industry on prioritizing needed rule revisions and will develop a plan for updating the cost-of-casualty amount based on the industry's prioritization recommendations. We will continue to monitor FAA's actions in response to this recommendation.

Recommendation: To improve the transparency and accountability over the compensation paid to WYO companies and set appropriate compensation rates, the FEMA administrator should take into account WYO company characteristics that may impact companies' expenses and profits when developing the new compensation methodology and rates.

Agency: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: Open

Comments: According to FEMA officials, FEMA is responding to this recommendation as part of its development of a final rule on WYO compensation practices, required by the Biggert-Waters Act. FEMA issued a Notice of Proposed Ruling on July 8, 2019 seeking comments by September 6, 2019 regarding possible approaches to incorporate actual flood expense data into the WYO payment methodology.

Recommendation: To reduce the cost of the crop insurance program and achieve budgetary savings for deficit reduction or other purposes, Congress should consider reducing premium subsidies for the highest income participants.

Agency: Congress
Status: Open

Comments: As of May 2020, Congress has not acted on this matter.

Recommendation: To strengthen FHA accountability for complying with the Fund's statutory capital requirement, Congress should consider requiring that FHA submit a capital restoration plan and regular updates on plan implementation whenever the capital ratio falls below 2 percent as calculated in the annual actuarial review of the Fund, or the Fund's financial condition does not meet other congressionally-defined requirements.

Agency: Congress
Status: Open

Comments: As of October 2019, Congress had not yet acted on this matter for consideration.

Recommendation: To provide additional perspective on the Fund's financial status, FHA should disclose estimates of the individual cash flows associated with the liability for loan guarantees (premiums, claims, and recoveries), including their value for each year of the 30-year estimation period.

Agency: Department of Housing and Urban Development: Federal Housing Administration
Status: Open

Comments: As of October 2019, HUD had not yet acted on this recommendation.

Recommendation: To establish full-risk rates for properties with previously subsidized rates that reflect their risk for flooding, the Secretary of the Department of Homeland Security (DHS) should direct the FEMA Administrator to develop and implement a plan, including a timeline, to obtain needed elevation information as soon as practicable.

Agency: Department of Homeland Security
Status: Open
Priority recommendation

Comments: As of January 2020, FEMA continues its multi-year effort to redesign its risk rating system to reflect industry best practices, such as providing credible, understandable rates based on graduated risk. As part of this redesign, FEMA plans to obtain multiple sources of data and information about a property's risk of flooding--from which it may be able to derive elevation information on some properties--to develop the insurance rate. FEMA has delayed implementation of the new risk rating system until 2021, pending further analysis. In addition, FEMA issued a Request for Information on obtaining structural elevation information from third party sources and is reviewing responses from potential vendors. The agency also encourages subsidized policyholders who seek to ensure the appropriateness of their NFIP rates to voluntarily submit elevation documentation. We will continue to monitor the extent to which FEMA is able to produce elevation information for all currently subsidized properties.

Recommendation: To reduce the cost of the crop insurance program, Congress may wish to consider limiting the subsidy for premiums that an individual farmer can receive each year or reducing the subsidy for all farmers participating in the program, or both limiting and reducing these subsidies.

Agency: Congress
Status: Open

Comments: As of March 2020, Congress has not taken action to implement this matter.

Recommendation: To strengthen accountability and transparency in FHA's management of the Fund, Congress may wish to consider clarifying (1) the definition of the Fund's capital ratio--specifically, whether the denominator of the ratio was intended to be the amortized insurance-in-force; (2) the definition of the phrase "established target subsidy rate" used in HERA; and (3) the nature and extent of information that FHA should be reporting on subsidy rates pursuant to HERA, recognizing that subsidy rates are generally only reestimated once a year under current budget processes.

Agency: Congress
Status: Open

Comments: As of October 2019, Congress had not acted on this matter for consideration.

Recommendation: To provide transparency and accountability over the payments FEMA makes to WYOs for expenses and profits, the Secretary of Homeland Security should direct the Under Secretary of Homeland Security, FEMA, to determine in advance the amounts built into the payment rates for estimated expenses and profit.

Agency: Department of Homeland Security
Status: Open

Comments: According to FEMA officials, FEMA is responding to this recommendation as part of its development of a final rule on WYO compensation practices, required by the Biggert-Waters Act. FEMA's current payment rates do not explicitly consider WYO insurers' actual expenses and profit. FEMA issued an Advance Notice of Proposed Ruling on July 8, 2019 seeking comments by September 6, 2019 regarding possible approaches to incorporating actual flood insurance expense data into the WYO payment methodology. As of February 2020, FEMA officials said that they were reviewing comments received in response to the July 2019 notice.

Recommendation: To provide transparency and accountability over the payments FEMA makes to WYOs for expenses and profits, the Secretary of Homeland Security should direct the Under Secretary of Homeland Security, FEMA, to annually analyze the amounts of actual expenses and profit in relation to the estimated amounts used in setting payment rates.

Agency: Department of Homeland Security
Status: Open
Priority recommendation

Comments: According to FEMA officials, FEMA is responding to this recommendation as part of its development of a final rule on WYO compensation practices, required by the Biggert-Waters Act. However, GAO has reported that an annual analysis of the WYO insurers' actual expenses and profit could be regularly performed in relation to FEMA's existing payment methodology. FEMA issued an Advance Notice of Proposed Ruling on July 8, 2019 seeking comments by September 6, 2019 regarding possible approaches to incorporating actual flood insurance expense data into the WYO payment methodology. As of February 2020, FEMA officials said that they would complete an annual analysis of WYO data by the end of fiscal year 2020 and that they were reviewing comments received in response to the July 2019 notice.

Recommendation: To provide transparency and accountability over the payments FEMA makes to WYOs for expenses and profits, the Secretary of Homeland Security should direct the Under Secretary of Homeland Security, FEMA, to consider the results of the analysis of payments, actual expenses, and profit in evaluating the methods for paying WYOs.

Agency: Department of Homeland Security
Status: Open

Comments: According to FEMA officials, FEMA is responding to this recommendation as part of its development of a final rule on WYO compensation practices, required by the Biggert-Waters Act. FEMA issued an Advance Notice of Proposed Ruling on July 8, 2019 seeking comments by September 6, 2019 regarding possible approaches to incorporating actual flood insurance expense data into the WYO payment methodology. As of February 2020, FEMA officials said that they were reviewing comments received in response to the July 2019 notice.

Recommendation: To increase the usefulness of the data reported by WYOs to the National Association of Insurance Commissioners (NAIC) and to institutionalize FEMA's use of such data, the Secretary of Homeland Security should direct the Under Secretary of Homeland Security, FEMA, to take actions to obtain reasonable assurance that NAIC flood insurance expense data can be considered in setting payment rates that are appropriate, including identifying affiliated company profits in reported flood insurance expenses.

Agency: Department of Homeland Security
Status: Open

Comments: According to FEMA officials, FEMA is responding to this recommendation as part of its development of a final rule on WYO compensation practices, required by the Biggert-Waters Act. FEMA can also take actions, in addition to any actions related to the rule, to develop method(s) for obtaining reasonable assurance that NAIC data is accurate and usable for setting payment rates before implementation of a new compensation methodology. FEMA issued an Advance Notice of Proposed Ruling on July 8, 2019 seeking comments by September 6, 2019 regarding possible approaches to incorporating actual flood insurance expense data into the WYO payment methodology. As of February 2020, FEMA officials said that they were reviewing comments received in response to the July 2019 notice.

Recommendation: To increase the usefulness of the data reported by WYOs to the National Association NAIC and to institutionalize FEMA's use of such data, the Secretary of Homeland Security should direct the Under Secretary of Homeland Security, FEMA, to develop comprehensive data analysis strategies to annually test the quality of flood insurance data that WYOs report to NAIC.

Agency: Department of Homeland Security
Status: Open

Comments: According to FEMA officials, FEMA is responding to this recommendation as part of its development of a final rule on WYO compensation practices, required by the Biggert-Waters Act. FEMA can also take actions, in addition to any actions related to the rule, to develop and implement data analysis strategies to annually test the quality of flood insurance data WYO insurers report to NAIC before implementation of a new compensation methodology. FEMA issued an Advance Notice of Proposed Ruling on July 8, 2019 seeking comments by September 6, 2019 regarding possible approaches to incorporating actual flood insurance expense data into the WYO payment methodology. As of February 2020, FEMA officials said that they were reviewing comments received in response to the July 2019 notice.

Recommendation: The Secretary of the Department of Homeland Security should direct FEMA to take steps to ensure that its rate-setting methods and the data it uses to set rates result in full-risk premiums rates that accurately reflect the risk of losses from flooding. These steps should include, for example, verifying the accuracy of flood probabilities, damage estimates, and flood maps; ensuring that the effects of long-term planned and ongoing development, as well as climate change, are reflected in the flood probabilities used; and reevaluating the practice of aggregating risks across zones.

Agency: Department of Homeland Security
Status: Open
Priority recommendation

Comments: In April 2018, FEMA officials told us they had begun to redesign NFIP's risk rating system to help ensure policy rates better reflect the risk of flooding. The redesign, known as Risk Rating 2.0, includes efforts to use catastrophe models, stochastic approaches, and updated map information to better reflect the variation in flood risk. These reforms are also intended to improve how FEMA's rating process accounts for general and specific factors that affect flood probabilities and damage. While FEMA initially announced that new rates for all single-family homes would go into effect nationwide on October 1, 2020, it announced in November 2019 that it would defer implementation to October 1, 2021. FEMA said this would allow it to conduct a comprehensive analysis of the proposed rating structure so as to protect policyholders and minimize any unintentional negative effects of the transition, and that the new implementation date would cover all NFIP policies.

Recommendation: The Secretary of the Department of Homeland Security should direct FEMA to ensure that information is collected on the location, number, and losses associated with existing and newly created grandfathered properties in NFIP and to analyze the financial impact of these properties on the flood insurance program.

Agency: Department of Homeland Security
Status: Open

Comments: As of February 2020, FEMA officials said they had finished identifying properties with grandfathered premium rates and that they planned to analyze their economic implications as part of their efforts to update their premium rate setting approach, known as Risk Rating 2.0. FEMA plans to implement this redesign on October 1, 2021.