42 USC 4057 - Alternative loss allocation system for indeterminate claims

View all text of Part A [§ 4051 - § 4057]

§ 4057. Alternative loss allocation system for indeterminate claims

(a) DefinitionsIn this section:

(1) Administrator

(2) COASTAL Formula

(3) Coastal State

(4) Indeterminate loss

(A) In general

(B) RequirementsAn insurance claims adjuster certified under the national flood insurance program shall only determine that a loss is an indeterminate loss if the claims adjuster determines that—

(i) no material remnant of physical buildings or man-made structures remain except building foundations for the specific property for which the claim is made; and

(ii) there is insufficient or no tangible evidence created, yielded, or otherwise left behind of the specific property for which the claim is made as a result of the named storm.

(5) Named storm

(6) Post-storm assessment

(7) State

(8) Secretary

(9) Standard insurance policy

(10) Property

(11) Under Secretary

(b) Establishment of flood loss allocation formula for indeterminate claims

(1) In general

(2) ContentsThe standard formula established under paragraph (1) shall—

(A) incorporate data available from the Coastal Wind and Water Event Database established under section 3611(f) of title 33;

(B) use relevant data provided on the National Flood Insurance Program Elevation Certificate, or other data or information used to determine a property’s current risk of flood, as determined by the Administrator, for each indeterminate loss for which the formula is used;

(C) consider any sufficient and credible evidence, approved by the Administrator, of the pre-event condition of a specific property, including the findings of any policyholder or insurance claims adjuster in connection with the indeterminate loss to that specific property;

(D) include other measures, as the Administrator considers appropriate, required to determine and allocate by mathematical formula the property damage caused by flood or storm surge associated with a named storm; and

(E) subject to paragraph (3), for each indeterminate loss, use the post-storm assessment to allocate water damage (flood or storm surge) associated with a named storm.

(3) Degree of accuracy required

(1) In generalSubject to paragraph (3), the Administrator may use the post-storm assessment and the COASTAL Formula to—

(A) review flood loss payments for indeterminate losses, including as part of the quality assurance reinspection program of the Federal Emergency Management Agency for claims under the national flood insurance program and any other process approved by the Administrator to review and validate payments under the national flood insurance program for indeterminate losses following a named storm; and

(B) assist the national flood insurance program to—

(i) properly cover qualified flood loss for claims for indeterminate losses; and

(ii) avoid paying for any loss or damage to property caused by any peril (including wind), other than flood or storm surge, that is not covered under a standard policy under the national flood insurance program.

(2) Federal disaster declaration

(3) National Academy of Sciences evaluation

(A) Evaluation required

(i) EvaluationUpon publication of the COASTAL Formula in the Federal Register as required by subsection (b)(1), and each time the Administrator modifies the COASTAL Formula, the National Academy of Sciences shall—(I) evaluate the expected financial impact on the national flood insurance program of the use of the COASTAL Formula as so established or modified; and(II) evaluate the validity of the scientific assumptions upon which the formula is based and determine whether the COASTAL formula 1

1 So in original. Probably should be capitalized.

can achieve a degree of accuracy of not less than 90 percent in allocating flood losses for indeterminate losses.

(ii) Report

(B) Effective date and applicability

(i) Effective date

(ii) Effect of modifications

(d) Disclosure of COASTAL FormulaNot later than 30 days after the date on which a post-storm assessment is submitted to the Secretary under section 3611(b)(2)(E) of title 33, for each indeterminate loss for which the COASTAL Formula is used pursuant to subsection (c)(2), the Administrator shall disclose to the policyholder that makes a claim relating to the indeterminate loss—

(1) that the Administrator used the COASTAL Formula with respect to the indeterminate loss; and

(2) a summary of the results of the use of the COASTAL Formula.

(e) ConsultationIn carrying out subsections (b) and (c), the Secretary shall consult with—

(1) the Under Secretary for Oceans and Atmosphere;

(2) the Director of the National Institute of Standards and Technology;

(3) the Chief of Engineers of the Corps of Engineers;

(4) the Director of the United States Geological Survey;

(5) the Office of the Federal Coordinator for Meteorology;

(6) State insurance regulators of coastal States; and

(7) such public, private, and academic sector entities as the Secretary considers appropriate for purposes of carrying out such subsections.

(f) Recordkeeping

(g) Civil penalty

(1) In general

(2) Deposit

(h) Rule of construction

(i) Applicability

(j) Rule of Construction

(k) Rule of construction

(Pub. L. 90–448, title XIII, § 1337, as added Pub. L. 112–141, div. F, title II, § 100253, July 6, 2012, 126 Stat. 974; amended Pub. L. 116–271, title II, § 201(b), Dec. 31, 2020, 134 Stat. 3346.)