Historical Events Affecting National Flood Legislation and Flood Insurance

A Chronology of Major Events Affecting the

National Flood Insurance Program

A Chronology of Major Events Affecting

The National Flood Insurance Program

December 2005

Completed for the Federal Emergency Management Agency

Under Contract Number 282-98-0029

The American Institutes for Research

The Pacific Institute for Research and Evaluation

Deloitte & Touche LLP

Acronyms

CRS

FEMA

FHBM

FIA

FIMA

FIRM

GAO

NFIP

SFHA

TVA

USGS

WYO

Community Rating System

Federal Emergency Management Agency

Flood Hazard Boundary Map

Federal Insurance Administration

Flood Insurance and Mitigation Administration

Flood Insurance Rate Map

Fiscal year

General Accounting Office

National Flood Insurance Program

Public Law

Special Flood Hazard Area

Tennessee Valley Authority

United States Geological Survey

Write Your Own

Please inform Marion Chastain ([email protected]) of all errors and significant omissions.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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1824 In Gibbons v. Ogden, the U.S. Supreme Court construes the Constitution’s

commerce clause (Article I, Section 8) to permit the federal government to fi-

nance and construct river improvements. Within two months, Congress appro-

priates funds and authorizes the Corps of Engineers to remove certain naviga-

tion obstructions from the Ohio and Mississippi Rivers.

1849-50 The Swamp Land Acts of 1849 and 1850 transfer swamp and overflow land

from federal control to most state governments along the lower Mississippi

River on the condition that the states use revenue from the land sales to build

levees and drainage channels. The Acts require no federal funds.

1853 Charles S. Ellet, Jr., a leading civil engineer, produces a congressionally man-

dated report on the Ohio and Mississippi Rivers, insisting that the flood prob-

lem is growing as cultivation increases. He suggests enlarging natural river

outlets, constructing higher and stronger levees, and building a system of

headwaters reservoirs on the Mississippi River and its tributaries. Most engi-

neers of the period disagree.

1861 In a Report upon the Physics and Hydraulics of the Mississippi River, Captain

Andrew A. Humphreys, Corps of Topographical Engineers, and Lieutenant

Henry L. Abbott support the completion of the existing levee system and ex-

clude alternative flood controls, partly for economic reasons. The emphasis on

levees represents the primary focus of U.S. policy on flood control well into

the 20

century.

1866 Captain Humphreys becomes Chief of Engineers of the U.S. Army and labors

to quash opposition to the “levees-only” policy he advocates.

1879 Congress creates the Mississippi River Commission and gives it authority to

survey the Mississippi and its tributaries, formulate plans for navigation and

flood control, and report on the practicability and costs of the various alterna-

tive courses of action.

By 1890 The entire 700-mile, lower Mississippi Valley, from St. Louis to the Gulf of

Mexico, is divided into state and locally organized levee districts.

1891 W. J. McGee, in “The Floodplains of Rivers,” published in Forum, XI, states

that “as population has increased, men have not only failed to devise means for

suppressing or for escaping this evil [flood], but have a singular short-

sightedness, rushed into its chosen paths.”

1913 A flood in the Ohio River Valley kills 415 people and causes about $200 mil-

lion in property loss. The flood spurs public interest in flood control, leading to

the creation of basin-wide levee associations and other lobbying groups.

1916 The U.S. House of Representatives’ Committee on Flood Control is created.

The committee becomes a forum for congressional proponents of flood control.

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1917 A Flood Control Act (PL 64-367) is approved. Congress appropriates $45 mil-

lion for a long-range and comprehensive program of flood control for the

lower Mississippi and Sacramento Rivers. In doing so, Congress accepts fed-

eral responsibility for flood control. The Act includes a requirement for local

financial contributions in flood-control legislation and authorizes the Corps of

Engineers to undertake examinations and surveys for flood-control improve-

ments and to provide information regarding the relation of flood control to

navigation, waterpower, and other uses. The Act establishes important prece-

dents and frameworks for the Flood Control Act of 1936 (see 7/1936).

1927 The Great Mississippi River Flood shows the limits of Humphreys’ “levees-

only” policy. The death toll is 246 but may have reached 500, more than

700,000 people are homeless, 150 Red Cross camps care for more than

325,000 refugees, and property damage exceeds $236 million. Nearly 13 mil-

lion acres of land are flooded.

5/1928 Through a new Flood Control Act (PL 70-391), Congress adopts a flood-

control plan that abandons the levees-only approach. The Act commits the fed-

eral government to pay for the construction of protective measures. The non-

federal contribution is to provide rights-of-ways for the levees along the main

stem. Levee districts and state governments will maintain the levees. Expendi-

tures of $325 million are authorized.

1929 The private insurance industry abandons the coverage of flood losses.

5/1933 Congress creates the Tennessee Valley Authority (TVA) through PL 73-17 as

a government corporation armed with the power to plan, build, and operate

multipurpose development projects for water resources within the 40,000

square miles of the Tennessee River basin.

1933 In response to a major earthquake in California, and contrary to past traditions,

Congress enacts legislation to provide direct assistance to private citizens suf-

fering disaster damage by issuing federal loans through the Reconstruction Fi-

nance Corporation.

4/1934 In response to several disasters that befell communities in disparate parts of the

country, Congress enacts PL 73-160, which makes $5 million in loans avail-

able to victims of all natural disasters, including floods.

7/1936 The Flood Control Act of 1936 (PL 74-738) provides for the construction of

approximately 250 projects using funds for work relief. Congress appropriates

$310 million to initiate construction and $10 million to complete examinations

and surveys. The Act establishes a two-pronged attack on the problem of re-

ducing flood damages: the Department of Agriculture will develop plans to

reduce runoff and retain more rainfall and the Corps of Engineers will develop

engineering plans for downstream projects. The Act represents the initial de-

velopment of a national flood-control program.

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1938 Harlan H. Barrows, one of 12 members on the Water Resources Committee

(WRC), submits a report to the WRC President, expressing his views that good

planning requires linking land and water use. A report submitted by the Ohio-

Lower Mississippi Regulation Subcommittee, which Barrows chairs, states

that, “if it would cost more to build reservoir storage than to prevent floodplain

encroachment, all relevant factors considered, the latter procedure would ap-

pear to be the best solution.”

1938 President Franklin Roosevelt forwards to the Water Resources Committee a

Corps of Engineers’ document calling for the construction of 81 reservoirs in

the Ohio and Mississippi River basins. Barrows expresses concern that further

studies are needed. The need for more studies temporarily ends further con-

struction proposals.

1942 Gilbert White finishes Human Adjustment to Floods: A Geographic Approach

to the Flood Problem in the United States. He advocates, “adjusting human

occupancy to the floodplain, and at the same time, of applying feasible and

practicable measures for minimizing the detrimental impacts of floods.” He

characterizes the prevailing national policy as “essentially one of protecting

the occupants of floodplains against floods, of aiding them when they suffer

flood losses, and of encouraging more intensive use of floodplains.”

9/1950 The Disaster Relief Act of 1950 (PL 81-875) provides “an orderly and continu-

ing means of assistance by the Federal Government to States and local gov-

ernments in carrying out their responsibilities to alleviate suffering and dam-

age resulting from major disasters,” including floods. State governments must

formally request the president to declare a major disaster. If granted, the fed-

eral government will then provide disaster assistance “to supplement the ef-

forts and available resources of states and local governments in alleviating the

disaster.” The law creates the first permanent system for disaster relief without

the need for congressional action.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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1950 An internal report from the TVA, Major Flood Problems in the Tennessee

River Basin, notes that many communities have flood problems but because of

insufficient development in flood-prone areas, flood-control projects cannot be

justified. Gordon Clapp, Chairman of the TVA’s Board, responds, “What

should TVA do, wait for development of the floodplains so that a flood control

project could be justified?” He recommends circulating the report to solicit

other reactions, particularly from the Division of Regional Studies.

After reviewing the report, Aldred J. Gray, director of the Division of Regional

Studies, and a proponent of White’s concepts, proposes a different approach to

the problem. TVA and state representatives will join in a technical appraisal of

the possible application of flood data to planning programs. The joint appraisal

will include research into the types and forms of flood information needed by

state and local planning programs and how such data can be applied to com-

munity planning, land-use controls, and capital improvement programs. During

its early work in this area, TVA coins the term “floodplain management.”

8/1951 Following massive flooding in Kansas and Missouri that causes more than

$870 million in damage, President Harry Truman recommends the creation of

a “national system of flood disaster insurance, similar to the war damage in-

surance of World War II.” In Truman’s words: “The lack of a national system

of flood disaster insurance is now a major gap in the means by which a man

can make his home, his farm, or his business secure against events beyond his

control.” Truman proposes a system of flood insurance based on private insur-

ance with re-insurance by the federal government.

1/1952 President Truman calls for the enactment of legislation to establish a federal

flood insurance program and recommends that $50 million be appropriated to

create a flood insurance fund.

5/1952 President Truman submits proposed legislation to Congress to establish a na-

tional system of flood-disaster insurance. The proposed legislation would es-

tablish a maximum amount of insurance of $25,000; establish rates to cover all

expenses, including a proper reserve for losses; and authorize federal agencies

that make or guarantee loans to require borrowers to purchase flood insurance

where it is available.

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1953 The TVA embarks on a pioneering cooperative program to tackle local flood

problems. In cooperation with each of the states in the Tennessee River’s wa-

tershed, they prepare an initial list of 150 communities with significant flood

problems and agree on an order for undertaking studies to identify flood haz-

ards. Communities having the most urgent need can request a study of their

flood problems from the TVA, which will fund the process. This offer, how-

ever, does not meet universal acceptance.

Circumstances surrounding these studies significantly retard the early progress

of TVA’s assistance program for floodplain management. To solve this im-

passe, two hypothetical floods are computed: the “maximum probable” and the

“regional.” The TVA uses the maximum probable flood to design flood-

control works. This leads to development of a model by the TVA’s engineers

that is large enough to use in planning and that state planners believe to be fair

and reasonable. The model is based on actual flood occurrences near the stud-

ied streams. The TVA’s flood-hazard information reports developed during

this period do not change substantially until the mid-1970s.

8/1954 The Watershed Protection and Flood Prevention Act (PL 83-566) authorizes

flood-protection structures in upstream watersheds (defined as smaller than

250,000 acres). The Act also authorizes the U.S. Department of Agriculture’s

Soil Conservation Service (now the Natural Resources Conservation Service)

to participate in comprehensive watershed management projects in cooperation

with states and their subdivisions.

1954 Walter B. Langbein, an employee of the U.S. Geological Survey (USGS), de-

signs a report format consisting of a map with pertinent text in the margins.

This report becomes the Hydrologic Investigations Atlas No. 1 (HA-1). This

successful format is often repeated in following years.

6/1955 PL 84-71, the Coastal and Tidal Areas – Survey – Damages Act, requires the

Corps of Engineers to conduct a study of the behavior and frequency of hurri-

canes on the eastern and southern coasts and to assess “possible means of pre-

venting loss of human lives and damages to property….”

1955 William G. Hoyt and Walter B. Langbein, two noted hydrologists, endorse

White’s concepts in their book, Floods, which traces the evolution of public

flood-control policies, describes current problems, and suggests desirable

changes. White characterizes their work as the first to synthesize the scientific

information about floods.

1/1956 In a budget message to Congress, President Dwight Eisenhower recommends

legislation to establish, on an experimental basis, an “indemnity and reinsur-

ance program, under which the financial burden resulting from flood damage

would be carried jointly by the individuals protected, the States, and the Fed-

eral Government.” He requests $100 million to start the program.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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8/1956 The Federal Flood Insurance Act of 1956 (PL 84-1016) directs the Housing

and Home Finance Agency to establish a program of federal insurance and re-

insurance against the risks of losses resulting from floods and tidal disasters.

The program is intended to provide up to $10,000 in insurance per dwelling

and to encourage private companies to provide coverage for risks above that

amount. The cost of coverage for policyholders will be the same regardless of

their location.

9/1956 The Housing and Home Finance Agency creates the Federal Flood Indemnity

Administration to carry out tasks set forth in the Federal Flood Insurance Act

of 1956.

1956 A study for the American Insurance Association on floods and flood losses

strengthens insurers’ conviction that flood insurance is not commercially fea-

sible.

6/1957 In the absence of technical studies to determine the costs of starting a federal

program for flood insurance, Congress does not appropriate any funds for the

Federal Flood Indemnity Administration. As a consequence, the administration

ceases to exist.

11/1958 A study by Gilbert White and his colleagues, Changes in Urban Occupancy of

Flood Plains in the United States, reveals what had happened during the previ-

ous two decades. With land-use pressures and few incentives to stay out of po-

tential flood zones, occupancy in these zones is increasing, even in urban areas

where population is declining. Federal incentives are creating a new perception

that if a serious flood hazard develops, the federal government will deal with

it.

11/1958 In Regulating Flood Plain Development, Francis C. Murphy notes that no

more than eight communities had enacted floodplain zoning before 1955. By

1958, 49 communities had ordinances. To convince others of the need for more

regulations, he argues that regulating development on the floodplain is a nec-

essary and practicable way to reduce the drain of both floods and protective

measures on the national economy. He observes that governments are reluctant

to enact land-use management practices because they have no flood maps or

other data that indicate the extent and character of local flooding.

12/1958 The growing loss of property and the cost of flood damage from several major

hurricanes and floods convinces the Council of State Governments to recom-

mend that one federal agency be directed by Congress to cooperate with other

federal agencies and state governments to prepare reports providing data on the

magnitude and frequency of floods in flood-prone areas.

1958 By this time, only seven states have enacted and are enforcing floodplain man-

agement regulations, principally for narrow-channel encroachment areas.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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1958 The Corps of Engineers prepares draft legislation providing for the systematic

collection and dissemination of flood data as a new Corps’ mission.

8/1959 The TVA submits a report to Congress proposing a program to reduce dam-

ages associated with floods (A Program for Reducing the National Flood

Damage Potential: Memorandum of the Chairman to Members of the Com-

mittee on Public Works, U.S. Senate, 86

Cong., 1

Sess., 31 Aug. 1959). In its

letter of transmittal, the TVA states that it “believes that local communities

have the responsibility to guide their growth so that their future development

will be kept out of the path of floodwaters. With the States and communities of

the Tennessee Valley, TVA has developed a means of putting this proposition

into action.” Floodplain management formally enters the federal agenda with

the report’s submission.

1959 Floods at Topeka, Kansas (HA-14) is published, the first in a series flood at-

lases.

1959 The USGS adopts flood-inundation maps as a means to depict information

about floods. Publishing such maps, which delineate boundaries of inundated

areas, provide profiles of water surfaces, and show flood-frequency relations,

becomes a standard means of reporting about floods.

7/1960 Amendments to the Flood Control Act contained in PL 86-645 authorize the

Corps of Engineers to compile and disseminate information on floods and

flood damages at the request of a state or responsible local agency. As a result

of the Act, the Corps of Engineers establishes a Flood Plain Management Ser-

vice and thus promotes the use of nonstructural measures for dealing with

floods.

1960 John R. Sheaffer publishes the first comprehensive study on floodproofing,

Flood Proofing: An Element in a Flood Damage Reduction Program.

1/1961 The U.S. Senate’s Select Committee on National Water Resources issues a re-

port on floodplain management. The report becomes the means through which

the concepts of floodplain management are officially recommended. The report

calls for major efforts in five categories. Among these are recommendations

that the federal government delineate flood-hazard areas and encourage enact-

ment of land-use regulations for floodplains.

1961 A flood atlas, Floods at Boulder, Colorado (HA-41), summarizes the results of

a study of Boulder Creek in which areas inundated by floods of several fre-

quencies were constructed synthetically from past records and physical surveys

of the floodplain.

1962 The State of Washington enacts a law that provides for the establishment of

flood-control zones when data are available.

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8/1964 Following the “Good Friday” earthquake and subsequent seismic waves in

Alaska in March, Congress ushers in the direct subsidy, or grant, as a federal

disaster relief policy through PL 88-451 (the 1964 Amendments to the Alaska

Omnibus Act).

1964 Gilbert White’s Choice of Adjustment to Floods, based on a field study in La-

Follette, Tennessee, analyzes existing methods and practices and addresses

alternative means of dealing with flood problems by occupants, communities,

and federal agencies. His study aids the ongoing discussions and debates con-

cerning the paths that should be taken and the ways of canvassing the whole

range of alternatives for achieving desirable land use.

7/1965 The Water Resources Planning Act of 1965 (PL 89-90) creates the Water Re-

sources Council (WRC), an independent agency composed of the secretaries of

federal agencies with responsibilities for water resource management. Its pur-

pose will be to study, coordinate, and review water and related land resource

requirements, policies, and plans.

11/1965 The Southeast Hurricane Disaster Relief Act (PL 89-339) is passed in response

to Hurricane Betsy and other hurricanes, which devastated the south in 1963

and 1964. The Act mandates the Secretary of the Department of Housing and

Urban Development to “undertake an immediate study of alternative programs

which could be established to help provide financial assistance to those suffer-

ing property losses in floods and other natural disasters, including alternative

methods of Federal disaster insurance….”

1965 The TVA has prepared 92 reports on floodplains covering 112 communities.

Forty-three of these communities have officially adopted floodplain regula-

tions in their zoning ordinances, subdivision regulations, or both.

1965 California encourages “local levels of government to plan land use regulations

to accomplish floodplain management and to provide state assistance and guid-

ance as appropriate.”

1965 The Bureau of the Budget’s Task Force on Federal Flood Control Policy is es-

tablished. It represents a significant step toward a unified federal policy for

managing the nation’s floodplains.

1965 The National Association of Insurance Commissioners’ Flood and Hurricane

Committee and National All-Industry Flood Insurance Committee are created.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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8/1966 The Task Force on Federal Flood Control Policy, with Gilbert White as chair,

issues A Unified National Program for Managing Flood Losses (U.S. House of

Representatives, House Document 465, 89

Cong., 2

Sess.). The report ex-

amines ways in which the federal government can decrease flood losses with-

out large expenditures for flood control. It is supportive of state and local regu-

lation of the use of lands exposed to flood hazard.

Concluding that federally subsidized insurance will provide an important in-

centive to local communities to participate in a flood insurance program, the

report recommends a system of structural and nonstructural approaches to

flood control. In addition, the report recommends that a practicable national

program of flood insurance be established and calls for an integrated program

to manage losses from floods that would involve federal, state, and local gov-

ernments and the private sector. The report also recommends a limited, ex-

perimental test of a national flood insurance program before nationwide im-

plementation. The report warns, however, that “if misapplied an insurance pro-

gram could aggravate rather than ameliorate the flood program.” The report

estimates that subsidies for existing high-risk properties will be required for

approximately 25 years.

8/1966 Executive Order No. 11296, Evaluation of Flood Hazard in Locating Feder-

ally Owned or Financed Buildings, Roads, and Other Facilities, and in Dis-

posing of Federal Lands and Properties, is issued. It directs federal agencies to

provide leadership in encouraging an effort to prevent unnecessary use of the

country’s floodplains and to lessen the risk of flood losses; evaluate flood haz-

ards; and develop procedures to ensure that flood-hazard evaluations are con-

ducted before initiating federally financed or supported actions in floodplains.

8/1966 President Lyndon Johnson submits to Congress a feasibility study of a flood

insurance program conducted by the Secretary of the Department of Housing

and Urban Development and mandated by the Southeast Hurricane Disaster

Relief Act (see 11/1965). The study, Insurance and Other Programs for Fi-

nancial Assistance to Flood Victims, concludes that flood insurance is feasible

and will promote the public interest. Flood insurance is viewed both as a

means to help individuals bear the risks of flood damage and, equally, as a

means to discourage unwise occupancy of floodplains. The report envisions a

program of essentially private character but with continued large-scale partici-

pation of the federal government. The approach recommended would include

subsidies of premiums for existing properties in high-risk areas. To encourage

widespread purchase of flood insurance, the report further recommends that all

“lending institutions entrusted with savings or deposits and under any form of

Federal supervision…shall require in high-risk areas flood insurance at unsub-

sidized rates on all new mortgages based on new residences….”

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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1966 New Jersey authorizes a state agency to delineate and mark flood-hazard areas

to identify reasonable and proper use of these areas according to their relative

flood risk and to develop and disseminate other information on floodplains.

1966 Wisconsin enacts a comprehensive act providing for the adoption of a reason-

able and effective zoning ordinance for floodplains by every county, city, and

village before January 1, 1968.

5/1967 The Corps of Engineers publishes Guidelines for Reducing Flood Damages.

6/1967 The USGS publishes a 19-volume study of the magnitude and frequency of

floods in the United States.

7/1967 Representatives of 26 federal agencies adopt a draft of Proposed Flood Hazard

Evaluation Guidelines for Federal Executive Agencies. These guidelines deal

with methodologies and standards to be used in developing information about

flood hazards, including delineation of the floodplain, elevations that floods of

various magnitudes would reach, flood velocities, and the probability of floods

of various magnitudes. Use of the 100-year flood as the base standard is first

advocated. After receiving these guidelines, the Bureau of Budget asks the

Water Resources Council to conduct a more detailed review, revise where ap-

propriate, and issue the Guidelines (see 9/1969).

12/1967 The Water Resources Council (WRC) publishes Bulletin No. 15, A Uniform

Technique for Determining Flood Flow Frequencies, a study prepared by its

Hydrology Committee to determine the best methods to analyze the frequency

of floods. The WRC adopts the techniques presented in the bulletin for use in

all federal planning involving water and related land resources and recom-

mends their use by state and local governments and private organizations.

8/1968 The Corps of Engineers, which has been mapping and identifying flood-prone

areas since 1962, estimates that there are about 5,000 flood-prone communities

in the United States.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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8/1968 The National Flood Insurance Act of 1968 (Title XII of the Housing and Urban

Development Act of 1968 [PL 90-448]) creates the National Flood Insurance

Program (NFIP) and the Federal Insurance Administration (FIA) within the

Department of Housing and Urban Development to provide flood insurance in

communities that voluntarily adopt and enforce floodplain management ordi-

nances by June 30, 1970, that meet minimum NFIP requirements.

Residents will be eligible for flood insurance after the NFIP identifies local

flood-hazard areas and establishes actuarial rates. Occupants of structures in

floodplains will have their premiums subsidized. Structures built in floodplains

after the Act’s passage will pay actuarially based premiums.

Section 1360 of the 1968 Act authorizes the Secretary of the Department of

Housing and Urban Development to consult with, receive information from,

and enter into any agreements or other arrangements with heads of other fed-

eral departments or enter into contracts with any persons or private firms in

order that he may identify and publish information with respect to all flood-

plain areas, including coastal areas located in the United States that have spe-

cial flood hazards, within five years following the date of the Act’s approval.

Section 1361 authorizes the NFIP to develop criteria that states and communi-

ties can apply to deter development in flood-prone areas.

The Act also requires that flood-risk zones be established in all flood-prone

areas and that rates of probable flood-caused losses be estimated for the vari-

ous flood-risk zones for each of these areas within 15 years (i.e., by August

1,1983) following enactment.

Section 1302 (c) requires that “the objectives of a flood insurance program

should be integrally related to a unified national program for floodplain man-

agement,” and directs that “… the President should transmit to Congress for its

consideration any further proposals for such a unified program.” The Bureau of

the Budget assigns responsibility to prepare such a proposal to the Water Re-

sources Council.

Section 1314 denies disaster relief to persons who could have purchased flood

insurance for a year or more and did not do so.

The Act creates the National Flood Insurance Fund in the Department of the

Treasury. Premiums from the sales of flood insurance will be deposited into

the fund, and losses, operating costs, and administrative expenses are paid out

of the fund, which will operate without fiscal-year limitations. The NFIP is

authorized to borrow up to $1 billion from the Department of the Treasury to

cover losses that exceeds the program’s revenues. Presidential approval is re-

quired for loans exceeding $500 million.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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8/1968 PL 90-448, the Urban Property Protection and Reinsurance Act of 1968 (part

of the Housing and Urban Development Act of 1968), establishes the position

of Federal Insurance Administrator within the Department of Housing and Ur-

ban Development.

12/1968 The Secretary of the Department of Housing and Urban Development dele-

gates authority for administering the NFIP to FIA.

12/1968 The industry’s flood insurance pool, the National Flood Insurers Association

(NFIA), authorized in accordance with sections 1331 and 1332 of the National

Flood Insurance Act, is created. Administered by the Insurance Services Of-

fice, membership in the NFIA is open to all qualified companies licensed to

write property insurance under the laws of any state. The companies will sell

and service policies written as part of the NFIP.

1968 The USGS begins to outline approximate floodplain boundaries on topog-

raphic maps. The USGS agrees to assist FIA in its mapping efforts by prepar-

ing detailed flood insurance studies, restudies, and limited detailed studies

(completed when comprehensive studies cannot be justified).

1968 The Corps of Engineers creates a Floodplain Management Services Branch in

the Planning Division of the Office of Chief of Engineers.

1/1969 The National Flood Insurance Program begins its operations.

2/1969 HUD’s Federal Insurance Administration (FIA) publishes a proposed rule con-

taining the first floodplain management criteria for the NFIP. The proposed

rule does not mention the 100-year flood standard or any other flood standard.

5/1969 George K. Bernstein becomes the first Federal Insurance Administrator.

6/1969 The Final Rule regarding floodplain management criteria defines special flood

hazard areas as the 100-year floodplain for mapping purposes. Communities

are required to “take into account the relation between first floor elevations

and the anticipated level of the 100-year flood” in developing floodplain man-

agement measures.

6/1969 The Department of Housing and Urban Development and the National Flood

Insurers Association (NFIA) sign an agreement for the marketing of flood in-

surance policies and the adjustment of claims. Under the agreement, the NFIA

will appoint a servicing company, generally on a statewide basis, to dissemi-

nate information on the insurance aspects of the program both to the public and

to insurance agents, to process all insurance policies, and to handle the adjust-

ment of claims for loss payments.

The first flood insurance policies are sold.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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6-8/1969 The first communities joining the NFIP become eligible for participation using

data from the USGS and Corps of Engineers. Metairie, Louisiana, and Fair-

banks, Alaska, enter the NFIP on June 25. Alexandria, Virginia, enters on Au-

gust 22 with Flood Insurance Rate Maps (FIRMs) based on Corps of Engi-

neers’ Floodplain Information Reports. Biloxi, Mississippi, and other commu-

nities along the Mississippi River become eligible for program participation at

the end of 1969 with studies using data from the USGS. A FIRM is an official

map of a community on which both the special hazard areas and the risk pre-

mium zones applicable to the community are delineated.

8/1969 Hurricane Camille strikes the Gulf Coast. In parts of Mississippi, water is 24

feet above the normal high tide. More than 250 people die because of the

storm, which one retrospective analysis suggests may be “the most significant

economic weather event in the world’s history.” No communities that suffer

from flooding are covered by the NFIP.

8/1969 Congress approves the National Environmental Policy Act (NEPA) (PL 91-

190), which declares environmental quality as a national goal and establishes a

procedure to assess the environmental impacts of proposed federal projects and

programs that could significantly affect the environment. NEPA lays the legis-

lative and administrative foundation for evaluating environmental resources

associated with river corridors and coastal zones.

9/1969 The Water Resources Council publishes a revised version of Flood Hazard

Evaluation Guidelines for Federal Executive Agencies for federal agencies,

states, and consultants to review through experimental use. The revised guide-

lines define the floodway as that portion of the floodplain needed to accommo-

date passage of the 1-percent annual chance flood without increasing the level

of the flood by more than one foot.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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12/1969 Section 408 of the Housing and Urban Development Act of 1969 (PL 91-152)

provides for an “emergency program” (in contrast to the original or “regular”

program) whereby limited amounts of subsidized insurance can be made avail-

able in participating communities before completion of detailed flood insur-

ance studies and FIRMs (see 6-8/1969).

FIA will provide communities in the emergency program with Flood Hazard

Boundary Maps (FHBMs). Such maps, which are based on available informa-

tion, outline the areas estimated to be within the 100-year floodplain. FHBMs

are less detailed than FIRMs, which are based on comprehensive flood insur-

ance studies. A community will be eligible for the regular program when a

FIRM is completed for that community.

The emergency program does not affect the requirement that such communities

must adopt adequate floodplain management regulations. The law also post-

pones until December 31, 1971, the deadline for communities to enact meas-

ures for floodplain management that are necessary for continued participation

in the NFIP and revises the definition of a flood to include inundation from

mudslides. The deadline is subsequently extended several times.

12/1969 In an interpretation of congressional intent, FIA decides to use data provided

by a local community to identify and map flood-prone areas so the community

can participate in the emergency program. Thus, it becomes an accepted prac-

tice for FIA to issue a map delineating flood-hazard areas of a community if

sufficient flood data exist. If sufficient flood data do not exist and there is ade-

quate information to indicate a potential for destructive floods in a community,

a map is issued that shows the entire community to be flood prone.

12/1969 Only four communities have joined the NFIP, and only 16 policies have been

sold.

1/1970 Four communities are in the “regular program,” 16 flood insurance policies

have been sold, and $392,000 of coverage is in force.

3/1970 NFIP regulations are published in the Federal Register. The regulations con-

tain the first criteria for floodplain management. These criteria are general in

nature and do not contain specific standards, as do current criteria. To maintain

eligibility, participating communities must adopt measures for floodplain man-

agement compliant with these regulations no later than December 31, 1971.

12/1971 Almost 920 communities are eligible for coverage under the NFIP. More than

87,000 flood insurance policies are in effect with coverage totaling $1.4 bil-

lion.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1971 The Water Resources Council publishes the first volume of Regulation of

Flood Hazard Areas to Reduce Flood Losses, which reports on a study that

used regulations to guide adjustment of individual land uses to meet flood

threats and avoid flood damages. The Council concludes that “the precise man-

ner in which Federal flood insurance and land use controls will be integrated is

unclear” and further notes that flood insurance “will not be an adequate substi-

tute for guiding new development or regulating existing development in flood

hazard areas.” The report includes draft statutes and local ordinances for regu-

lation of land uses in riverine and coastal flood hazard areas.

5/1972 The Water Resources Council, after receiving comments on their use (see

7/1967), further revises and publishes Flood Hazard Evaluation Guidelines for

Federal Executive Agencies.

6/1972 The Corps of Engineers publishes Flood-Proofing Regulations. State and local

officials have subsequently requested more than 100,000 copies of this docu-

ment.

6/1972 When Tropical Storm Agnes strikes the East coast, fewer than 1,200 communi-

ties participate in the NFIP, with only 95,000 policies and $1.5 billion of cov-

erage in force. Consequently, less than 1 percent of insurable damages are cov-

ered. Agnes causes $400 million in structural damage, but only $5 million is

paid in flood insurance claims.

7/1972 The NFIP’s subsidized rates for flood insurance are lowered by 37.5 percent to

encourage increased participation in the program.

10/1972 Congress approves the Water Pollution Control Act Amendments of 1972 (PL

92-500). Section 404 provides protection for wetlands and supplements the

Corps of Engineers’ existing permitting program for activities in navigable

waters, pursuant to Section 10 of the Rivers and Harbors Act of 1899. That Act

required permits for the discharge of dredged or fill materials into all “waters

of the United States.” Later court decisions interpret this provision to include

most of the nation’s wetlands.

10/1972 Congress passes the Coastal Zone Management Act (PL 92-583), one of sev-

eral acts that emphasize protection and enhancement of environmental quality.

1972 The Water Resources Council publishes the second volume of Regulation of

Flood Hazard Areas to Reduce Flood Losses. The volume explores in more

detail techniques to regulate subdivision of lands in flood-hazard areas. Like

the initial volume, the second volume contains draft regulations dealing with

subdivision regulations and regulations of coastal flood hazard areas.

1972 The NFIP develops new insurance rate tables based on nationwide risk zones,

which replace the former community risk zones.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

4/1973 Comprehensive revisions to NFIP regulations become effective on April 1.

The revisions include detailed criteria for floodplain management for commu-

nities and specific performance standards requiring the elevation or flood

proofing of structures to the elevation of the 100-year flood.

5/1973 The Federal Insurance Administrator estimates that there are approximately

10,000 flood-prone communities in the United States, or about twice as many

as had been estimated in 1968 (see 8/1968).

6/1973 In Water Policies for the Future, the National Water Commission raises con-

cerns about the NFIP’s high degree of subsidization as well as the practicality

of withholding emergency relief from people who could have covered their

losses by insurance but chose not to do so. The Commission further declares

that the “role that flood insurance should play in a unified national program for

reducing flood losses is not yet clear and there is a need for an independent

study of present flood insurance legislation and activities.” The report recom-

mends increased funding for the Corps’ Floodplain Management Services Pro-

gram. Subsequently, the Office of Management and Budget approves more

than $10 million for FY 1974 and comparable sums in the following years to

fund the Corps’ work on floodplain management.

6/1973 FIA initially relied on its small in-house staff to utilize base maps provided by

communities desiring to participate in the NFIP, augmented by flood data gen-

erated by the Corps of Engineers, the USGS, and others to map flood hazards.

As more communities are identified as being prone to floods, and as the num-

ber of participating communities increases, the scope of the mapping task ex-

ceeds FIA’s internal capabilities. Therefore, FIA hires three engineering firms

to identify communities for which flood data exist and to prepare Flood Hazard

Boundary Maps (FHBMs). These firms are asked to identify communities for

which flood data do not exist so that these communities can be referred to an-

other federal agency for study and the generation of the flood data.

Before 1973, flood-prone areas shown on early FHBMs are shaded, delineated

in a rectilinear or “blocked out” method (i.e., straight lines following easily

identifiable land features such as streets and railroads). This practice makes the

maps easy for lenders, insurance agents, and other laypersons to interpret but

results in an artificial representation of the true flood boundaries, which are

curvilinear and reflect the topography of the land. The use of blocked out flood

boundaries is standard for all NFIP mapping until the passage of the Flood

Disaster Protection Act (PL 93-234) in December 1973, which makes artificial

rectilinear flood boundaries unacceptable, especially for large, undeveloped

tracts of land.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

7/1973 In Actions Needed to Provide Greater Insurance Protection to Flood-Prone

Communities, the General Accounting Office (GAO) reports that FIA has no

monitoring system to determine whether communities are effectively enforcing

the floodplain management regulations they have adopted.

12/1973 The NFIP estimates that there are approximately 13,600 flood-prone communi-

ties in the United States (see 8/1968 and 5/1973).

12/1973 The Flood Disaster Protection Act of 1973 (PL 93-234) amends the National

Flood Insurance Act of 1968. The new Act, effective in March 1974:

 Increases the amounts of flood insurance available to property owners.

 Requires property owners in participating communities to purchase

flood insurance as a condition of receipt of federal or federally related

financial assistance on or after March 2, 1974, for acquisition, con-

struction, or improvement of structures in special flood hazard areas

(SFHAs). In addition, purchase of flood insurance is required before

property owners will be eligible to obtain federal disaster assistance for

construction or reconstruction purposes.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

12/1973

continued

 Requires the NFIP to identify, by June 30, 1974, all communities that

contain areas at risk for serious flood hazard and to notify these com-

munities that they can apply for participation in the NFIP or they will

be ineligible for certain types of federal assistance in their floodplains.

 As a condition of future federal financial assistance, requires states and

communities “to participate in the flood insurance program and to

adopt adequate floodplain ordinances with effective enforcement provi-

sions consistent with federal standards to reduce or avoid future flood

losses.” Participation must begin by July 1, 1975, or one year after noti-

fication that a community has flood-prone areas.

 Requires FIA to consult with local officials to implement its flood-

prone notification and identification procedures; to establish explicit

procedures whereby communities can appeal their flood-prone identifi-

cation; and to accelerate the insurance ratemaking studies.

 Allows the Department of Housing and Urban Development to imple-

ment the NFIP on an emergency basis until December 31, 1975, while

it completes determinations of flood-prone areas (see 12/1969).

 Provides for grandfathering, for purposes of determining insurance

rates, for structures built in flood-hazard areas before the areas are

identified as such. These pre-FIRM structures are not required to com-

ply with existing construction requirements.

 Mandates that federally regulated lending institutions cannot make, in-

crease, extend, or renew any loan on a property located in a SFHA in a

participating community without requiring flood insurance.

 Expands the definition of “flood” to include “flood-related erosion.”

 Repeals Section 1314 (denying disaster relief to persons who could

have purchased flood insurance for a year or more and did not do so)

because it is a disincentive to community participation.

In approving PL 93-234, Congress reaffirms the use of the 100-year flood as

the standard for identifying SFHAs and establishing land-use requirements.

SFHA have a 1-percent chance of being flooded in any given year (100-year

floodplain).

12/1973 Over 2,850 communities are participating in the NFIP.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1973 The Nixon Administration issues New Approaches to Federal Disaster Pre-

paredness and Assistance. The report concludes that federal assistance typi-

cally replaces rather than supplements nonfederal efforts. In addition, the re-

port notes that federal assistance for disasters is often perceived to be suffi-

ciently generous that “individuals, business, and communities had little incen-

tives to take initiatives to reduce personal and local hazards” (House Docu-

ment 93-100, 93

Congress, First Session).

1973 The USGS expands aerial coverage of flood-prone area maps and pamphlets to

include areas subject to future development. To guide this phase, the USGS

publishes a National Program for Managing Flood Losses: Guidelines for

Preparation, Transmittal, and Distribution of Flood-Prone Area Maps and

Pamphlets to assist the Water Resources Division to prepare the maps.

1/1974 Effective January 1, 1974, rates for flood insurance are lowered to encourage

wide acceptance of the new mandatory purchase requirement and to encourage

increased sales of the insurance. This is the second such decrease (see 7/1972).

More than 2,850 communities (including 2,264 in the emergency program) are

participating in the NFIP. About 312,000 policyholders have about $5.5 billion

of coverage.

3/1974 The Water Resources Development Act (PL 93-251) authorizes federal pro-

jects containing major “nonstructural” features. Section 73 directs all federal

agencies to consider nonstructural alternatives when reviewing any project in-

volving flood protection and to pay at least 80 percent of the cost of nonstruc-

tural flood control measures.

5/1974 The Disaster Relief Act Amendments of 1974 (PL 93-288) authorize the presi-

dent to make contributions to state and local governments to help repair, re-

store, reconstruct, or replace public facilities damaged or destroyed by a major

disaster. Section 314 requires that applicants for such assistance must comply

with regulations (to be developed) to assure that “such types and extent of in-

surance will be obtained and maintained as may be reasonably available, ade-

quate, and necessary to protect against future loss to such property.” The law

prohibits the federal government from requiring “greater types and extent of

insurance than are certified…as reasonable by the appropriate State insurance

commissioner….”

States and communities receiving federal disaster assistance will be required to

“agree that the natural hazards in the area in which the proceeds of the grants

or loans are to be used shall be evaluated and appropriate action shall be taken

to mitigate such hazards….”

The amendments represent the first congressional mandate for hazard mitiga-

tion as a precondition for federal disaster assistance.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

6/1974 The Flood Disaster Protection Act of 1973 (see 12/1973) required that the De-

partment of Housing and Urban Development identify all flood-prone commu-

nities and notify them of their special flood hazard areas by June 30. Of the

13,600 such communities so identified by December 1973, FIA had provided

FIRMs or FHBMs to less than two-thirds. By June 1974, an additional 2,700

communities are identified as flood-prone. Once a community is informed that

it is prone to floods, it has one year to qualify for the emergency program (see

12/1969) or six months to appeal its designation as a flood-prone community.

7/1974 FIA further reduces rates for flood insurance and introduces the direct bill sys-

tem for renewal of flood insurance policies.

7/1974 The U.S. District Court for the Middle District of Pennsylvania grants a mo-

tion to dismiss a civil action filed by the Commonwealth of Pennsylvania, et

al., against the United States, the Secretary of the Department of Housing and

Urban Development, and the National Flood Insurers Association, alleging that

the defendants negligently failed to make known the availability of flood in-

surance to Pennsylvanians who, as a result, suffered uninsured losses as a con-

sequence of the June 1972 and 1973 floods in Pennsylvania. The aggregate

damages suffered were alleged to be $1 billion. The U.S. Court of Appeals af-

firms the decision in June 1975.

8/1974 The Housing and Community Development Act of 1974 (PL 93-383) amends

the National Flood Insurance Act of 1968 by adding Section 1364 (commonly

known as the Jones’ amendment), which requires federally regulated lenders to

notify prospective borrowers of a property’s location in a SFHA, and subsec-

tion (e) to Section 1307 (commonly known as the Brooks’ amendment). In

communities where adequate progress has been made on the construction of a

federal flood-protection system that will afford protection against the 1-percent

annual chance flood, the Brooks’ amendment provides for the availability of

flood insurance at risk premium rates that will not exceed those that would ap-

ply if such a flood-protection system had been completed.

10/1974 Due to the requirements of the Flood Disaster Protection Act of 1973 (see bul-

let 4 at 12/1973), the first Letter of Map Amendment (LOMA), which excludes

a property from inadvertent inclusion in a SFHA, is issued. A LOMA amends

an effective FIRM. The role of the three mapping contractors is expanded to

process these map amendments.

The first community determined not to require a detailed study (i.e., minimal

conversion) is converted to the regular program. Similarly, the first community

determined not to be subject to inundation by the 100-year flood (i.e., non-

flood-prone conversion) joins the regular program in 1974.

11/1974 FIA hires a contractor to develop and maintain a computerized management

information system.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1974 Due to the accuracy required by the mandatory purchase requirement of the

Flood Disaster Protection Act of 1973 (see 12/1973), 10,000 FHBMs must be

revised to change the rectilinear boundaries of flood-prone areas to curvilinear

boundaries.

1974 The first private company begins providing flood-zone determination services

to lending institutions to assist them in complying with the mandatory pur-

chase requirements contained in the 1973 Act.

2/1975 Given the large number of flood insurance studies in progress and FIA’s lim-

ited staff, two engineering firms, referred to as technical evaluation contractors

(TECs), are contracted to review the study products that federal agencies cre-

ate and to put the NFIP’s maps in standard format.

3/1975 In National Attempts to Reduce Losses from Floods by Planning for and Con-

trolling Uses of Flood-Prone Lands, the GAO reports that federal agencies do

not adequately evaluate flood hazards in their programs. Many of the agencies,

the report notes, do not have or properly implement their flood-related proce-

dures. In addition, the report observes, Executive Order 11296 (see 8/1966)

has had limited effect in reducing flood losses due lack of implementing pro-

cedures and, among agencies that do have procedures, limited compliance.

3/1975 Proposed revisions to NFIP regulations are published in the Federal Register.

The proposed revisions will allow minimum requirements for floodplain man-

agement to differ depending on the amount of technical data available to com-

munities. Other proposed revisions will: allow the use, in establishing regula-

tions, of data from other federal or state agencies or consulting services in

communities where a FHBM has not yet been completed; require building

permits for construction in SFHA when FHBM have been issued; require that

all new construction must have the lowest floor above the 100-year flood level

in communities with FHBMs and in which 100-year flood-surface elevations

have been issued; and require new construction in coastal high hazard areas to

keep the space below the lowest floor free from obstructions or use “break-

away walls” when 100-year flood levels have been identified.

6/1975 Of the 21,411 communities that FIA has designated as flood-prone, 9,977 par-

ticipate in the NFIP, but only 549 have FIRMs and are in the regular program.

Summer

1975

The National Flood Insurers Association hires its own staff and relocates its

headquarters to suburban Washington, DC. The association assumes the func-

tions that the Insurance Services Office previously handled and retains the ser-

vicing carrier concept.

7/1975 Flood insurance studies are produced under interagency agreement with other

federal agencies through June, when FIA enters into contracts with engineering

firms to produce data for flood insurance studies.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

8/1975 Over 350 communities have appealed their designation as flood-prone. Based

on the appeals, 136 were found not to be flood-prone. An additional 2,445 ap-

peals have been received but not yet processed. Further appeals are possible

because not all communities have been notified of their flood-prone status.

9/1975 The GAO reports in Tulsa, Oklahoma’s Participation in the National Flood

Insurance Program, that FIA “does not formally monitor the flood insurance

program to insure that communities enforce approved flood plain management

regulations” or those of FIA (see 7/1973). The report also notes that the GAO

does “not question the validity of the 100-year flood level as the acceptable

standard for flood plain management” (see 12/1973).

1975 Gilbert White founds the Natural Hazards Center at the University of Colo-

rado, Boulder. The Center’s primary goal is to strengthen communication

among the researchers, individuals, organizations, and agencies that are con-

cerned with individual and public actions to reduce damages from disasters.

1975 The Interagency Task Force on Floodplain Management is created (see Water

Resources Council reorganizes, 1976).

3/1976 The Water Resources Council publishes Guidelines for Determining Flood

Flow Frequency (Bulletin No. 17), an updated and revised Bulletin No. 15, A

Uniform Technique for Determining Flood Flow Frequencies.

4/1976 The GAO, in Formidable Administrative Problems Challenge Achieving Na-

tional Flood Insurance Objectives, concludes that FIA has made considerable

progress in identifying flood-prone communities and in providing them with

FHBMs (see 12/1969). In contrast, FIA has made limited progress in complet-

ing the necessary studies to move communities into the regular program. De-

lays have occurred, according to the GAO, because of: a) ineffective planning

and scheduling of studies; b) delays in reviewing completed studies; and, c)

ineffective coordination and use of federal resources. FIA faces a deadline of

August 1, 1983, to complete its studies on all flood-prone communities (see

8/1968). To meet this deadline, FIA will have to increase its completion rate

from about 91 studies per year to about 2,600 per year.

The report also notes that FIA still has “not established an effective system for

monitoring community efforts to adopt and enforce required flood plain man-

agement regulations.” Consequently, in the words of the GAO, the federal gov-

ernment, “though heavily subsidizing the flood insurance program…had no

assurance that the communities’ flood-prone lands were being developed

wisely to prevent or minimize future flood losses” (see 7/1973 and 9/1975).

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

6/1976 The federal government shifts its fiscal year (FY), so that it will now end on

September 30 instead of June 30, as had previously been the case. Thus, FY

1976 was 15 months long. Flood studies and surveys receive their greatest sin-

gle-year appropriations, about $94 million. As a result, 2,300 flood insurance

studies are initiated. This amount equaled the total number initiated in the pre-

vious five years.

7/1976 The Water Resources Council publishes A Unified National Program for

Floodplain Management, which updates and revises House Document 465 (see

8/1966) in response to Section 1302 (c) of the National Flood Insurance Act of

1968. The report establishes the conceptual framework for floodplain man-

agement and recommends actions for improving such management and rec-

ommends “appropriate floodplain management programs and regulations or

control measures as a prerequisite to federal expenditures for the modification

of flooding on the impact of flooding.”

The report states that: “Delay in completion of flood insurance studies and the

resultant delay of community participation in the Regular program may permit

continued development and building at flood-prone locations and the subse-

quent grandfathering of these high risk developments under subsidized insur-

ance rates.”

10/1976 HUD’s Federal Insurance Administration issues a Final Rule that introduces

the terms “base flood” and “base flood elevation” and begins to phase out the

use of the term “100-year flood.”

12/1976 Comprehensive revisions to the NFIP’s requirements for floodplain manage-

ment become effective on December 31. These revisions remain the basis of

the NFIP’s current requirements for floodplain management.

1976 The Water Resources Council reorganizes, abolishing all of its technical com-

mittees. The Federal Interagency Floodplain Management Task Force succeeds

the Floodplain Management Technical Committee. The task force consists of

representatives from the TVA; the Departments of Agriculture, Army, Com-

merce, Energy, Housing and Urban Development, Interior, and Transportation;

the Environmental Protection Agency; and, eventually, the Federal Emergency

Management Agency (FEMA), which was created in 1979 (see 6/1978 and

4/1979). State representatives, through the Association of State Floodplain

Managers, attend the meetings as observers. The task force provides continuity

of communication between member agencies on issues related to floodplain

management.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1976 The NFIP adopts regulations that treat states as communities and accordingly

makes flood insurance available for state-owned properties in SFHAs only if

the state has adopted adequate regulations for the management of its flood-

plains. The state may also elect to self-insure its properties if suitable regula-

tions are in place.

1976 Robert J. Hunter is appointed Federal Insurance Administrator.

5/1977 Executive Order 11988, Floodplain Management, revokes and supersedes Ex-

ecutive Order 11296 (see 8/1966), which had limited success in reducing flood

losses. The new executive order directs federal agencies to assert a leadership

role in reducing flood losses and losses to environmental values that flood-

plains serve. Federal agencies are to avoid actions in or affecting floodplains

unless there are no practicable alternatives and to use the 100-year flood as the

base flood standard for the NFIP. The executive order is intended, in part, to

ensure that federal agencies do not undermine communities’ implementation of

regulations adopted to participate in the NFIP. The order directly references

NFIP’s criteria for floodplain management.

5/1977 Executive Order 11990, Protection of Wetlands, directs all Federal agencies to

avoid, if possible, adverse impacts to wetlands and to preserve and enhance the

natural and beneficial values of wetlands. Each agency is directed to avoid un-

dertaking or assisting in wetland construction projects unless the head of the

agency determines that there is no practicable alternative to such construction

and that the proposed action includes measures to minimize harm.

8/1977 Concerned with delays in issuing flood insurance studies, FIA decides to cir-

cumvent the state review and approval process. The states in Region V object.

FIA subsequently revises the study policy. The states’ success in altering the

policy change solidifies their cause and pushes them to form an association

that eventually becomes the Association of State Floodplain Managers.

8/1977 The National Flood Insurers Association issues a termination notice to the ar-

rangement with the Department of Housing and Urban Development in an at-

tempt to bring to its attention, and that of Congress, the serious nature of the

disagreements between the insurance pool and the government on issues of

authority, financial control, and other operating matters.

10/1977 FIA hires two additional engineering firms to perform technical evaluation ser-

vices because of the growing backlog of flood insurance studies in progress.

10/1977 Title VII of the Housing and Community Development Act of 1977 (PL 95-

128) further amends the National Flood Insurance Act of 1968 through the

“Eagleton Amendment.” This amendment permits federally regulated or in-

sured lenders to make conventional loans in flood-prone areas of nonpartici-

pating communities and to require that notification be given as to whether fed-

eral disaster assistance would be available in the event of a flood disaster.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

10/1977

continued

PL 95-128 also removes the prohibition against all forms of disaster assistance

within the SFHA of “sanctioned” communities and imposes the ban only on

federal disaster assistance related to a declared flood disaster; increases the

additional limits of insurance coverage available at risk premium rates; pro-

vides additional criteria under which flood-damaged property can be eligible

for purchase; and provides authority for low-interest loans for elevating struc-

tures located in floodways.

12/1977 Approximately 1.2 million flood insurance policies are in force, an increase of

almost 900,000 over the number in December 1973. Community participation

increases to approximately 15,000 in 1977 from approximately 3,000 in 1973.

12/1977 The Secretary of the Department of Housing and Urban Development and the

National Flood Insurers Association sign an Assumption Agreement terminat-

ing the involvement of the National Flood Insurers Association in the NFIP,

effective December 31, 1977.

1977 Following record floods in southwest Virginia, the TVA provides technical

and financial assistance to four communities in floodplain evacuation and relo-

cation. Local officials acquire several hundred properties, often as linear parks

next to streams.

1977 Gloria Jimenez is appointed Federal Insurance Administrator.

1/1978 The federal government assumes the direct insurance writing and claims han-

dling operation of the NFIP using an NFIP Servicing Agent to handle the sales

and servicing responsibilities. Prospective policyholders continue to go

through local agents and brokers to obtain their policies (see 6/1969 and

8/1977).

2/1978 The Water Resources Council publishes Guidelines for Implementing Execu-

tive Order 11988 – Floodplain Management. The report is designed to assist

federal agencies in preparing regulations and procedures for implementing the

order (see 5/1977). The document describes ways government agencies are to

avoid supporting development in floodplains when a practicable alternative

exists. As the Guidelines note, however, they “do not intend to prohibit flood-

plain development in all cases, but rather to create a consistent government

policy against such development under most circumstances.”

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

5/1978 In Texas Landowners Rights Association v. Harris, 453 F.Supp. 1025 (D.D.C.

1978), the State of Missouri, 40 political subdivisions in 12 states, and 30 indi-

vidual landowners within federally designated flood zones bring suit against

federal officials administering the NFIP. The plaintiffs contend that requiring

local governments to adopt regulations for building in floodplains under their

police powers, on pain of losing federal financial assistance for acquisition or

construction purposes within nonparticipating communities, violates the Con-

stitution’s Tenth Amendment. This sanction includes denial of FHA and VA

home mortgages in affected communities. The plaintiffs further argue that the

severity of the sanctions is such that the “choice” represents no choice at all,

but only coercion.

The court rejects the plaintiffs’ contention, holding that coercion is to be found

only where the federal government gives the states no choice, but mandates

compliance. In addition, the court rules that the NFIP’s implementation is not a

constitutionally prohibited taking of property without payment of just compen-

sation.

The U.S. Circuit Court for the District of Columbia (598 F.2d 311, 1979) and

the U.S. Supreme Court (cert. denied, 444 U.S. 927, 100 S.Ct. 267, 1979) sub-

sequently upholds the lower court’s judgment.

6/1978 President Carter forwards Reorganization Plan No. 3 of 1978 (House Docu-

ment 95-356, 95

Cong., 2

Sess.) to Congress. The plan calls for FEMA’s

establishment as an independent agency within the executive branch. The new

agency will coordinate federal disaster response-and-recovery efforts and con-

solidate the programs of five related agencies (FIA, the Federal Disaster Assis-

tance Administration, the Defense Civil Preparedness Agency, the Federal Pre-

paredness Agency, and the National Fire Prevention and Control Administra-

tion). The new agency will begin to operate on April 1, 1979.

6/1978 The initial identification of flood-prone communities is essentially completed.

More than 19,000 FHBMs have been produced.

6/1978 President Jimmy Carter’s Water Policy Initiatives include proposals to fund

the National Flood Insurance Act’s Section 1362. The section allows FEMA to

purchase certain insured properties that have either been substantially or re-

peatedly damaged and then to transfer the properties to a public agency to im-

prove floodplain management.

10/1978 Only 2,818 of 16,116 participating communities are in the regular program; the

rest remain in the emergency program (see 12/1969).

12/1978 The Corps of Engineers has completed 1,800 Floodplain Information Reports

covering 3,500 communities.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

3/1979 The GAO reports to the secretary of the Department of Housing and Urban

Development that use of the 100-year flood “as the single national standard of

regional flooding conditions has caused considerable controversy over the

years.” Noting that there were 127 floods between 1968 and 1978 that equaled

or exceeded the 100-year flood level in 62 counties, the GAO recommends an

evaluation of the 100-year flood as a national standard. This recommendation

contradicts GAO’s earlier conclusion (see 9/1975) that the 100-year flood stan-

dard is suitable.

The same report notes continuing deficiencies in FIA’s monitoring of commu-

nities’ compliance with the NFIP’s requirements (see 7/1973, 9/1975, and

4/1976). The GAO observed that FIA makes relatively few visits to communi-

ties and “major differences in the approach, scope, and duration of the visits

conducted by personnel from two different [FIA] regional offices.”

4/1979 On April 1, FIA and the NFIP are transferred from the Department of Housing

and Urban Development to the newly created FEMA.

8/1979 FEMA publishes a proposed rule in the Federal Register that will allow flood-

proofed residential basements in all communities. This rule is in response to

demand for basements in some areas of the nation. The proposed rule is with-

drawn in March 1981 after it is determined that flood-proofed basements can

pose an unacceptable threat to public safety under some flooding conditions.

8/1979 John Macy is appointed FEMA Director.

9/1979 An initiative to decentralize the production of maps to individual contractors is

implemented. It is subsequently determined that this is not a cost-effective ap-

proach. The previous system of having the technical evaluation contractors

produce the maps through printing by the Government Printing Office is re-

instituted.

The acquisition program for flood-damaged properties provided for in Section

1362 of the National Flood Insurance Act of 1968 is funded for the first time

(see 6/1978). Just over 100 properties are acquired in FY 1980. Over the next

14 years, approximately 1,400 properties are purchased at a cost of nearly $52

million. In addition to funding for Section 1362, Congress also provides funds

for the State Assistance Program to develop floodplain management capabili-

ties.

9/1979 Hurricane Frederic strikes Gulf Shores, Alabama, and nearby coastal commu-

nities causing severe damage to structures. This results in considerable contro-

versy about the adequacy of the NFIP’s V-zone construction standards; criteria

used to designate V-zones and V-zone flood insurance rates; and whether wave

heights should be added to coastal base flood elevations.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

9/1979

continued

Note: V-zones or coastal high hazard areas are the most hazardous coastal

flood zones because they are subject to high velocity wave action. V-zone des-

ignation is applied only to those areas along the coast where water depth and

other conditions support at least a three-foot wave height.

9/1979 A revised version of A Unified National Floodplain Management Program is

published and concludes that the NFIP “provides persuasive strength and bene-

ficial emphasis to floodplain management.”

9/1979 By the end of Fiscal Year 1979, nearly 16,600 communities are participating in

the NFIP, with 3,381 in the program’s “regular phase.” There are more than

1.6 million policies in force, covering about $60 billion in property. Through-

out the program’s life, total claims have exceeded 146,000, and total payments

to victims have exceeded $572 million.

12/1979 Approximately 1.85 million flood insurance policies are in effect, representing

$74.5 billion in coverage. More claims (86,360) are filed in 1979 than in any

subsequent year through 1999.

3/1980 A proposed rule is published in the Federal Register that would prohibit the

use of solid breakaway walls to enclose areas below the base flood elevation in

V-zones. In 1981, after a change in presidential administrations, the proposed

rule is withdrawn after the Office of Management and Budget raises concerns

that the rule revision is an unnecessary intrusion into the management of local

affairs.

4/1980 Damages from Hurricane Frederic result in a decision to incorporate wave

heights into base flood elevations in coastal areas. The impact of wave heights

on coastal flood levels is first added to FIRM for seven communities in Ala-

bama.

5/1980 FEMA adopts a policy that requires state and local governments to agree to

pay 25 percent of the eligible costs of public assistance programs (other than

individual and family grants). Prior to this time, the required nonfederal con-

tribution was subject to negotiation between FEMA and the affected state and

local governments.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

6/1980 The Office of Management and Budget’s memorandum, “Nonstructural Flood

Protection Measures and Flood Disaster Recovery,” directs that “all Federal

programs that provide construction funds and long-term recovery assistance

must use common flood disaster planning and post-flood recovery proce-

dures.” In response, 12 federal agencies approve an interagency agreement to

provide technical assistance to states and communities for nonstructural meas-

ures to reduce flood damage in flood-recovery efforts. The agencies form an

Interagency Flood Hazard Mitigation Task Force with responsibility for im-

plementing agreement.

In subsequent disasters interagency teams are sent to investigate opportunities

to employ nonstructural mitigation measures and to issue recommendations

before recovery and reconstruction advance to the point where such measures

could not be considered.

6/1980 FIA’s management explores ways in which the private insurance industry’s

state windpools can be used to assure prompt claims service in a major post-

flood hurricane disaster. The Single Adjuster Program is established. In this

voluntary program, individual windpools, or coastal plans, and the NFIP agree

in advance on the use of single adjusters to adjust both the wind and water

damage from hurricanes and to recommend the claim payments by each insurer

for risks that both a coastal plan and the NFIP insure.

9/1980 FEMA’s regulations implementing Executive Order 11988, Floodplain Man-

agement, and Executive Order 11990, Protection of Wetlands, are effective on

September 9. Although the primary focus of these regulations is on disaster

assistance, provisions are included to limit flood insurance coverage for certain

structures in floodways and for new structures in V-zones where wave heights

are not included in base flood elevations. On November 28, FEMA publishes a

notice of intent not to enforce these provisions. Instead, an interim rating sys-

tem is developed that includes a calculation of wave height on a case-by-case

basis.

10/1980 The Engineering Scientific Data Package (ESDP) system is established to ar-

chive and retrieve selected documentation necessary to recreate the elevation

information presented in a flood insurance study.

12/1980 FIA promulgates a methodology for assessing the flood hazards unique to al-

luvial fans in the arid West.

1980 Regulation of Flood Hazard Areas to Reduce Flood Losses is revised to em-

phasize the lessons drawn from experiences with floodplain management in the

1970s. The Regulation focuses on state and local programs, including innova-

tions that can exemplify effective reductions in flood losses in the future.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1980 FIA pilots a centralized map information facility, which uses state-of-the-art

technology to develop a centralized database of the flood zone for individual

structures that could be accessed by calling a toll free number. The pilot was

discontinued in 1981 because available technology was inadequate, the system

was not cost-effective, and the private sector was beginning to provide this

service.

1/1981 In Requests for Federal Disaster Assistance Need Better Evaluation, the GAO

recommends that FEMA “reevaluate and improve its assessment criteria” for

disaster and emergency declarations. The GAO had found a “lack of consis-

tency in the quality and methods” of assessing requests from governors for

declarations.

1/1981 Rates for flood insurance are increased by 19 percent for pre-FIRM structures

(i.e., structures for which construction or substantial improvement started on or

before December 31, 1974, or before the effective date of a community’s ini-

tial FIRM, whichever is later). The rate increase is the first in the NFIP’s his-

tory.

The initial legislation creating the NFIP allowed these rates to be substantially

lower than actuarial rates in an effort to promote communities participation in

the program. The rate increase in 1981, the first since the NFIP’s creation, be-

gins an effort to increase rates gradually to reduce, but not eliminate, the

amount of subsidy and to make the NFIP self-supporting for the average his-

torical loss year by 1988.

5/1981 Louis O. Giuffrida is appointed FEMA Director.

6/1981 An interim policy for accreditation of levees as providing 100-year protection

on NFIP maps is promulgated. This policy is finalized in 1986 with its publica-

tion in the Code of Federal Regulation, Title 44, Chapter 1, Section 65.10 (see

10/1986).

8/1981 Section 341 of the Omnibus Budget Reconciliation Act of 1981 (PL 97-35)

terminates, effective October 1, 1983, flood insurance coverage for new con-

struction and substantial improvements of structures on undeveloped coastal

barriers designated by the Secretary of the Department of Interior. FEMA par-

ticipates in the Coastal Barriers Task Force the Secretary establishes to desig-

nate the undeveloped coastal barriers. The Coastal Barrier Resources Act of

1982 (PL 97-348) later overtakes and supersedes this process (see 10/1982).

8/1981 Section 1345 of the 1968 Act, governing services by the insurance industry, is

amended to include subsection (c), which holds harmless insurance agents or

brokers for the errors and omissions of FEMA.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

8/1981 In Till v. Unifirst Federal Savings and Loan Association (653 F.2d 152), the

U.S. Court of Appeals for the Fifth Circuit concludes that the National Flood

Insurance Act does not provide an express or implied federal statutory cause of

action against a federally regulated lending institution for failing to require

flood insurance or to notify a prospective borrower that a dwelling is in a

floodplain. In subsequent years, U.S. Courts of Appeals for the Fourth Circuit

(Arvai v. First Federal Savings and Loan Association, 698 F.2d 683, 1983),

the Seventh Circuit (Mid-America National Bank of Chicago v. First Savings

and Loan Association of South Holland, 737 F.2d 638, 1984), and the Eighth

Circuit (Hofbauer v. Northwestern National Bank of Rochester, 700 F.2d 1197,

1983) reach similar conclusions.

9/1981 The NFIP establishes a methodology to assess the contribution of wave run-up

to flood elevations for communities along the open coast. This methodology is

applied in several communities in Maine that had initiated flood insurance

studies during FY 1981.

9/1981 FIA establishes a goal for the NFIP to achieve self-supporting status for an

average historical loss year by 1988. Achieving this goal would mean the

elimination of subsidies for pre-FIRM properties.

9/1981 FIA opens discussions with representatives of the insurance industry concern-

ing re-involvement in the NFIP that ultimately develops into the Write Your

Own (WYO) Program (see 10/1983).

10/1981 FEMA begins to use information on floods developed for purposes other than

the NFIP (e.g., flood-flow estimates developed to size road crossings and

bridges by state highway departments) as a cost-savings measure.

A new rating system for post-FIRM V-zone buildings is implemented to reflect

the additional risk of surge and wave height and to offer an individual risk-

rating option. Post-FIRM properties are those for which construction or sub-

stantial improvement started on or after the effective date of a community’s

initial FIRM or after December 31, 1974, whichever is later.

1981 The Water Resources Council updates Bulletin No. 17, Guidelines for Deter-

mining Flood Flow Frequency (Bulletin 17B of the Hydrology Committee,

U.S. Water Resources Council). This document, first published in 1967 (Bulle-

tin No. 15), is the guide most government agencies use when conducting flood-

frequency studies.

1981 The NFIP’s premium rates are increased by 45 percent for pre-FIRM struc-

tures, as part of FEMA’s effort to reduce subsidies and to make the NFIP self-

supporting for an average historical loss year. Over the next seven years rates

will increase by 120 percent.

1981 Jeffrey S. Bragg is appointed Federal Insurance Administrator.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

4/1982 Approximately 62 percent of premiums paid for flood insurance are subsi-

dized.

8/1982 As part of President Ronald Reagan’s Task Force on Regulatory Relief, cre-

ated in January 1981, the Office of Management and Budget directs FEMA to

investigate whether federal agencies are complying with the requirements of

Executive Order 11988, issued in May 1977. In addition, FEMA is to: a) de-

termine what impact, if any, the executive order is having on the level of fed-

eral support in designated flood-hazard areas and b) review the base, or “100-

year” flood standard used in implementing the executive order.

8/1982 The GAO, in National Flood Insurance: Marginal Impact on Flood Plain De-

velopment, Administrative Improvements Needed, concludes that FEMA needs

a better monitoring program to assure that local communities are enforcing

floodplain regulations. According to the report, many premiums for flood in-

surance are based on erroneously designated (misrated) flood zones. In addi-

tion, the report concludes that this insurance creates a “marginal added incen-

tive for development in coastal and barrier island communities.”

9/1982 Funding for the Water Resources Council ceases, although the Council is

never officially dissolved.

10/1982 The Coastal Barrier Resources Act (PL 97-348) creates the Coastal Barrier

Resources System (CBRS). The Act prohibits new federal expenditures (in-

cluding the issuance of new federal flood insurance and most disaster assis-

tance for new construction and substantial improvements) in designated units

of the CBRS on the Atlantic and Gulf Coasts on and after October 1, 1983.

Existing flood insurance policies can remain in force.

1982 The third volume of Regulation of Flood Hazard Areas to Reduce Flood

Losses, started at the time of the Water Resource Center’s demise, is subse-

quently completed and published by the TVA. The three volumes advance the

understanding and application of land-use regulations in flood- hazard areas as

a principal tool in reducing vulnerability to flood risk.

1/1983 Due to what the GAO labels as data and methodological weaknesses in the de-

termination of rate structures, the GAO finds that the NFIP has not collected

sufficient premiums to cover the cost of providing insurance to almost two mil-

lion policyholders. As a result, National Flood Insurance Program: Major

Changes Needed if it is to Operate without a Federal Subsidy points out that

FIA had to borrow $854 million from the Department of the Treasury between

1970 and 1980.

2/1983 A system to maintain an inventory of levees, by community name, accredited

as providing 100-year protection on NFIP maps begins.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

2/1983 In The Effect of Premium Increases on Achieving the National Flood Insur-

ance Program’s Objectives, the GAO finds that FEMA’s decision in January

1981 to raise rates for flood insurance policies has led to a decline in the total

number of policies, from 2.01 million policies in the month before the rate in-

crease to 1.86 million in November 1982. The GAO identifies several addi-

tional factors, such as a decline in the housing market and a smaller number of

recent floods that might explain the decrease in the number of policyholders.

4/1983 Responsibility for flood insurance studies and for the issuance of single-lot,

single-structure, Letters of Map Amendment and Letters of Map Revision is

decentralized to FEMA’s regional offices.

4/1983 In Approaches for Converting National Flood Insurance Program Communi-

ties from the Emergency Phase to the Regular Phase, the GAO concludes that

FEMA will not meet the August 1983 deadline contained in the National Flood

Insurance Act of 1968 for providing FIRMs for all flood-prone communities.

The GAO explains that the missed deadline is due both to the complexity of

the task and that FEMA has not used less costly and time-consuming tech-

niques to produce the maps. The GAO also notes FEMA’s estimate that ap-

proximately $153 million will be required to complete the mapping effort.

The GAO further observes that the imminent expiration of the emergency pro-

gram in May 1983 (see 12/1969) will mean that over 290,000 policyholders

will lose coverage unless Congress acts to extend the program.

9/1983 FEMA completes The 100-year Base Flood Standard and the Floodplain Man-

agement Executive Order, which the Office of Management and Budget had

requested in August 1982 (see 8/1982). The President’s Task Force on Regula-

tory Relief had selected Executive Order 11988 on Floodplain Management

and the 100-year standard for review. The report concludes that both the 100-

year standard and the executive order should be retained. For example, the re-

port concludes that the 100-year base flood “is strongly supported and being

applied successfully by all levels of government…and no alternatives have

been identified that are superior to it….” In addition, however, the report con-

cludes that some federal agencies have not adopted procedures to implement

the executive order. Other agencies have adopted procedures, but they are not

consistent with the executive order.

10/1983 In recognition of the 1968 Act’s purpose that FIA arrange for appropriate par-

ticipation in the NFIP by private-sector property insurers, flood insurance be-

comes available from insurance companies that had entered into an arrange-

ment with the Federal Insurance Administrator to sell and service flood insur-

ance under the Write Your Own (WYO) Program. At the time, there were

1,897,176 policies and slightly over $111 billion of coverage in force. During

the first year, 48 companies agreed to become WYO participants in FY 1984.

The first WYO policies are sold in November 1983.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

10/1983 The map revision and technical evaluation contractor services are consolidated

and the number of technical evaluation contractors is reduced from seven to

three as the requirements for the flood insurance study program are changed.

10/1983 Effective October 1, the NFIP revises the rate schedules for flood insurance

premiums and makes significant amendments to flood policies. To simplify

insurance ratings, the NFIP groups Zones A1 to A30 under a single set of

schedules and makes a similar reduction for Zones V1 to V30. Optional, higher

deductibles become available so policyholders concerned with catastrophic

protection can reduce their flood insurance premiums. In addition, flood insur-

ance policies no longer cover:

 Finished walls, floors, ceilings, and other similar improvements to

basement areas;

 Enclosures and building components located below the lowest elevated

floor of an elevated building except for the required utility connections

and the footing, foundation, anchorage system, etc. required to support

the elevated building; and

 Contents building machinery and equipment located in a basement area

or below the lowest elevated floor of an elevated building, except

stairways not separated from the building. For buildings where con-

struction started before this date, coverage continues for sump pumps,

water tanks, oil tanks, furnaces, hot water heaters, washers, dryers,

freezers, air conditioners, heat pumps, and electrical boxes.

10/1983 FIA limits flood insurance coverage for basements to reduce future flood-claim

payments. This action is based on FIA’s findings that, between 1978 and 1982,

the claim-loss frequency of buildings with basements was almost four times

higher than the claim-loss frequency for buildings without basements. As a

result of the change, the NFIP will no longer provide unlimited coverage of the

contents of basements or finished walls, floors, ceilings. Coverage will con-

tinue for such items as oil tanks, furnaces, hot water heaters, heat pumps, and

air conditioners.

10/1983

Continued

The controversial nature of the change in coverage leads to several lawsuits,

which are decided in favor of FIA, as well as a report by the GAO (see Federal

Emergency Agency’s Basement Coverage Limitations, completed in 1/1986).

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

11/1983 The Housing and Urban-Rural Recovery Act of 1983 (PL 98-181) extends un-

til September 30, 1985, the deadline for the establishment of flood-risk zones

in floodplain areas and requires FEMA to submit to Congress a plan for bring-

ing all communities containing flood-risk zones into full program status by

September 30, 1987. The Act also prohibits any increase in premiums charged

for flood insurance before September 30, 1984, and directs FEMA to submit a

report to Congress explaining the rate structure and any rate increase antici-

pated before October 1, 1985.

FEMA subsequently notifies Congress that all remaining flood studies can be

completed by 1991.

1983 The TVA publishes Floodplain Management: The TVA Experience to provide

information about the authority’s approach to working with state and local of-

ficials in floodplain management.

1983 The TVA joins with the Natural Hazards Research and Applications Informa-

tion Center at the University of Colorado to evaluate the effectiveness of ef-

forts to prevent flood damage. The Center forms an advisory group of national

experts in floodplain management, develops the initial evaluation procedures,

and conducts a pilot test in several area communities. The results are published

in Determining the Effectiveness of Efforts to Reduce Flood Losses: The TVA

Experience.

1/1984 In response to FEMA’s review of the 100-year base flood standard (see

9/1983) the Office of Management and Budget (OMB) agrees that “the 100-

year base flood standard appears to be working well and, given its widespread

use, it does not appear to be in the public interest to adopt another methodol-

ogy.”

5/1984 The first countywide FIRM, for Marion County, Indiana, becomes effective.

The FIRM shows the flood risks for all incorporated communities within the

county as well as its unincorporated portions.

6/1984 A demographic survey of communities participating in the NFIP’s Emergency

Program identifies those communities where expected development in the

floodplain would justify incurring the costs of a detailed study.

9/1984 A Risk Studies Completion and Full Program Status Plan is submitted to Con-

gress by FEMA (see 11/1983). The plan identifies how cost-containment

measures will be implemented to achieve the most economical conversion of

about 7,000 communities to the Regular Program on or before September 30,

1991. A benefit-cost strategy is promulgated to standardize decision-making as

to which communities will be converted by other means.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

9/1984

continued

Largely because of the results of the demographic survey completed in June

and the application of benefit-cost considerations, emphasis is given to con-

verting low-growth communities to the Regular Program through the minimal

conversion process. As a result, 1,871 conversions to the Regular Program oc-

cur in FY 1984. This is the largest number of conversions in any year of the

NFIP’s history.

1/1985 The Map Initiatives Project is completed after more than two years of review

and discussion by a task force comprised of representatives from the major

user groups. Consequently, a new format is specified for NFIP maps to make

them more “user-friendly.” Changes include a reduction in the number of risk

zones from 68 to 9; the elimination of flood-hazard identification dates; and

the consolidation of essential information on flood insurance and floodplain

management on one map, thus eliminating the need for separate FIRM and

FHBM.

9/1985 FIA publishes Appeals, Revisions and Amendments to Flood Insurance Maps –

A Guide for Community Officials, a document written in lay language to ex-

plain the mechanisms for revising or amending NFIP maps. More than 12,000

copies of this manual are distributed before it is revised in January 1990.

10/1985 The first of more than 500 Limited Detail Studies (LDS) is initiated as a cost-

containment measure to provide flood-risk zones and base flood-elevation in-

formation to communities that would experience low-to-moderate develop-

ment pressure in their SFHA during the 15-year period beginning in 1985.

10/1985 The Community Assistance Program (CAP) is established to provide assis-

tance on floodplain management to communities by drawing on resources in

addition to FEMA’s regional offices. The State Support Services Element,

which replaces the State Assistance Program, uses states to provide this assis-

tance. Similarly, the Federal Support Services Element makes use of federal

agencies such as the TVA, USGS, the Corps of Engineers, and the Soil Con-

servation Service.

10/1985 The NFIP’s Community Compliance Program (CCP) is established to provide

a credible means to ensure that communities adequately enforce regulations on

floodplain management adopted as a condition of participation in the NFIP.

The program provides procedures for the probation and suspension of commu-

nities and the denial of flood insurance for individual structures under Section

1316 of the National Flood Insurance Act and builds on the mutually suppor-

tive relationship between flood insurance ratings and floodplain management.

10/1985 The Corps of Engineers’ National Flood Proofing Committee is formed to ad-

vance the application of flood-proofing techniques.

11/1985 Julius W. Becton, Jr. is appointed FEMA Director.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1985 The TVA publishes A Guide to Evaluate a Community’s Floodplain Manage-

ment Program to document how others could use the TVA’s evaluation proce-

dures to judge community floodplain management programs.

1985 The first Annual Report of the Association of State Floodplain Managers sum-

marizes activities of state initiatives and resources independent of the NFIP.

The annual report represents slightly more than half the states and is not com-

piled through a formal survey.

1/1986 The NFIP’s regulations are revised on January 1 to provide a probation proce-

dure for participating communities that fail to adequately enforce floodplain-

management measures adopted to meet NFIP criteria. As part of probation pro-

cedures, a $25 surcharge applies for any flood insurance policy newly issued

or renewed on and after October 1, 1986, for any property that is located

within a community that is on probation. This is intended to be an interim

process, short of community suspension, to increase public awareness of the

situation and to encourage community officials to take the actions necessary to

comply with the NFIP’s requirements for floodplain management. Revisions

are also made to V-zone construction requirements and other criteria for flood-

plain management.

1/1986 FIA publishes A Standardized System for Flood Insurance Restudy Identifica-

tion and Prioritization to systemize decision making about communities that

are candidates for restudy and to assure that only cost-effective restudies are

initiated.

1/1986 FIA implements a fee-charge system for certain categories of conditional let-

ters of map correction to recover the cost of providing engineering services to

review and comment on proposed developments in participating communities’

floodplains.

3/1986 A revised Unified National Program for Floodplain Management notes that

the previous report has again become dated by the relative success and changes

in federal programs and by the strengthening of floodplain management at the

state and local levels. The report, building on earlier reports and subsequent

legislation, directives, and activities, establishes two broad goals for floodplain

management: to reduce loss of life and property from flooding and to reduce

loss of natural and beneficial resources from unwise land use.

The report urges that development in high hazard areas be avoided, except in

instances of public interest or in the absence of a suitable alternative.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

4/1986 FEMA proposes to change the process of declaring disasters; the criteria for

eligibility for federal assistance; and the nonfederal responsibility for major

disasters. The proposed regulations would also decrease the federal share of

disaster costs to 50 percent from 75 percent. Furthermore, states would be re-

quired to meet certain economic criteria before they would be eligible to re-

ceive federal assistance and to increase their cost-sharing responsibilities,

along with that of local governments, for disaster assistance.

Due to strong opposition in Congress, FEMA subsequently withdraws the pro-

posed rules.

9/1986 Harold T. Duryee is appointed Federal Insurance Administrator. He remains in

this position until August 1990.

9/1986 FIA produces the first digital FIRM, for Tulsa, Oklahoma. A five-year, $20

million program to digitize 25,000 FIRM panels for about 340 counties that

account for about 75 percent of all property-at-risk begins.

10/1986 The NFIP’s regulations on floodplain management are revised. Major changes

affect placement of manufactured homes, mechanical and utility equipment,

openings for enclosures, use of available flood data, and functionally depend-

ent uses. The revisions also formally terminate the State Assistance Program

and establish procedures for denial of insurance under Section 1316, obtaining

basement exceptions, revision of flood maps, and the recognition of levees.

The revisions result in the first required update of all NFIP community ordi-

nances since the 1976 rule revisions.

10/1986 On October 1, the NFIP makes the following amendments to the standard

flood insurance policy:

 Buildings in the course of construction that are not walled or roofed are

eligible for coverage. The standard deductible for these buildings is

double the post-construction amount and buildings in selected zones

with the lowest floor below the base flood elevation are not eligible.

 When an insured building has been inundated by rising lake waters

continuously for 90 or more days, and it appears reasonably certain that

a continuation of this flooding will result in damage reimbursable un-

der the flood policy, the insurer can pay the insured without waiting for

further damage to occur. To receive payment, the insured must sign a

release agreeing not to make further claims under the policy, not to re-

new the policy, and not to apply for NFIP insurance for a new property

at the same location.

 For mobile homes in mobile home parks or subdivisions, the date of

construction to determine pre- or post-FIRM status is the date a mobile

home is placed on its foundation.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1/1987 Effective January 1, the standard policy covers reasonable expenses incurred

for the temporary removal and storage of insured property because of the im-

minent danger of flooding up to the amount of the minimum building deducti-

ble. The policy no longer provides coverage for the cost of repairs to protect

insured property damaged by flood from further damage.

1/1987 President Ronald Reagan’s proposed budget for the next fiscal year recom-

mends that all subsidies for flood insurance be eliminated and that rates be in-

creased in order to recover “the clearly allocable costs of flood insurance from

beneficiaries.” The Reagan Administration also states that flood insurance can

be provided at affordable rates for homeowners by the private sector.

Spring 1987 A task force is created to investigate the feasibility of using the insurance in-

dustry’s services and facilities and, if feasible, to develop procedures for im-

plementing a Community Rating System (CRS). CRS would recognize a com-

munity’s efforts to undertake floodplain management activities beyond those

required for participation in the NFIP; increase the public’s awareness of flood

insurance; and assist property owners, insurance agents, and lenders seeking

individual property flood-risk information.

7/1987 FIA inaugurates a Limited Map Maintenance Program (LMMP) as a cost-

containment measure to process, in an expedient manner, revisions to NFIP

maps that are limited in scope. Authority to task federal agencies to perform

LMMP projects under interagency agreements is decentralized to FEMA’s re-

gional offices.

7/1987 The Supplemental Appropriations Act of 1987 (PL 100-71) suspends through

September 30, 1988, those portions of the rule revision (of October 1, 1986)

applicable to existing manufactured home parks and subdivisions. The Act also

requires FEMA to prepare a report on the impact of the regulations. The report

is submitted to Congress in September 1988.

10/1987 For the first time, the NFIP becomes self-supporting for the historical average

loss year. For the NFIP, the intent is to generate premiums at least sufficient to

cover expenses and losses relative to what is called the historical average loss

year, which differs from the traditional insurance definition of solvency. Dur-

ing FY 1986, no taxpayer funds are required to meet the NFIP’s flood insur-

ance expenses. In addition, at the beginning of the fiscal year, the NFIP is re-

quired for the first time to pay all program and administrative expenses with

funds derived from insurance premiums. Prior to this time, program costs for

administrative expenses, surveys, and studies, are financed through congres-

sional appropriations.

12/1987 Approximately 2.1 million flood insurance policies are in force, representing

$165 billion in coverage. The program’s net operating deficit is about $652

million.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1987 Minnesota establishes a Flood Hazard Mitigation Grant Assistance Program,

which will provide a 50-percent state/50-percent local, cost-share grant pro-

gram for activities to reduce damages from floods.

1987 The Unified National Program for Floodplain Management recommends the

evaluation of “floodplain management activities with periodic reporting to the

public and to Congress on progress toward implementation of a unified na-

tional program for floodplain management.” To implement this recommenda-

tion, the Federal Interagency Floodplain Management Task Force initiates an

assessment of the nation’s program for floodplain management. The national

assessment provides a comparative basis for justifying program budgets and

evaluating, over time, the effectiveness of various tools, policies, and planning

efforts for floodplain management.

4/1988 FIA inaugurates a fee-charge system to require certain requestors of NFIP

maps to reimburse the National Flood Insurance Fund for the costs of map-

ordering services. Entities required to use the NFIP maps as part of the pro-

gram’s implementation are exempt from these fees (i.e., local, state, and fed-

eral agencies, insurance agents, and lenders).

A pilot marketing analysis is conducted to determine if map users are inter-

ested in purchasing microfilm copies of NFIP maps as opposed to purchasing

these maps in hard-copy paper format. The results of this analysis identify a

small market and limited interest in microfilm.

4/1988 In Statistics on the National Flood Insurance Program, the GAO summarizes

data on the program’s operations through the end of FY 1987.

5/1988 To reduce the NFIP’s subsidy levels without using a rate increase, NFIP regu-

lations are amended to increase the standard building and contents deductible

for pre-FIRM properties to $1,000 from $750. Policyholders who wish to have

lower deductibles are given the option to “buy back” a $500 deductible sepa-

rately for building and contents coverage.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

5/1988 Due to record high-water levels in the Great Lakes, the Housing and Commu-

nity Development Act of 1987 (PL 100-242) amends the National Flood Insur-

ance Act of 1968 (through what is called the “Upton-Jones Amendment”) to

provide insurance benefits to structures in imminent danger of collapse due to

coastal erosion or undermining caused by waves or water levels exceeding cy-

clical levels. Following a local government’s condemnation of a structure, the

payment from flood insurance would be 40 percent of the structure’s value

prior to collapse and, following demolition, 60 percent of the structure’s value.

The approach represents the first federal use of erosion setbacks as a tool for

preventive management as part of an insurance program.

The Act also authorizes the president to contribute to states and local commu-

nities up to 50 percent of the cost of measures to mitigate hazards that substan-

tially reduce the risk of future damage or loss in any area affected by a major

disaster. Contributions cannot exceed 10 percent of the Public Assistance

grants made with respect to the disaster or $1 million, whichever is greater.

6/1988 The Claims Coordinating Office (CCO) is developed to facilitate the entrance

of multiple WYO companies into the Single Adjuster Program. When major

storm events occur, a CCO will be established within Integrated Flood Insur-

ance Claim Offices (IFICO) to provide a central clearinghouse for loss adjuster

assignments and data sharing, for the use of WYO companies, coastal plans,

and certain other property insurers willing to participate in coordinating a

claims-oriented response to the catastrophe. Subsequent experience indicates

that IFICO handle losses efficiently while coordinating activities with private

sector windpool associations, WYO companies, and FEMA’s Disaster Field

Office and Disaster Assistance Centers.

10/1988 FIA restructures commissions to encourage the sale of flood insurance. The

commission provisions for the WYO Program are also restructured under a

program to be re-evaluated in 1990. The provisions allow for commissions

equal to 14 percent of premiums with the opportunity to earn an additional

commission of one-tenth of 1 percent for each 1-percent increase in a com-

pany’s total policies in force up to a total commission of 17 percent of pre-

mium.

10/1988 The coverage limitation for enclosures (and contents) below an elevated struc-

ture is revised effective October 1 to apply only to elevated post-FIRM build-

ings (i.e., buildings for which the start of construction or substantial improve-

ment occurred on or after the effective date of the FIRM or after December 31,

1974, whichever is later).

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

11/1988 The Robert T. Stafford Disaster Relief and Emergency Assistance Act (PL

100-707) emphasizes hazard mitigation including funds to acquire or “buyout”

destroyed or damaged properties and to not rebuild in SFHAs; to rebuild in

nonhazardous areas; and to reduce exposure to flood risk in reconstruction.

The Act authorizes the allocation of up to 10 percent of FEMA’s Public Assis-

tance grants for hazard-mitigation projects, that are cost effective and that sub-

stantially reduce the risk of future damage, hardship, loss, or suffering. Bene-

fit-cost analysis is the recommended approach for determining cost-

effectiveness. Buyouts are also approved. When buyouts are authorized, they

are available to all affected residents of a flood-damaged area.

Section 404 establishes a Hazard Mitigation Grant Program. Grants are avail-

able to state and local governments and certain nonprofit organizations to im-

plement long-term hazard mitigation measures following a presidential decla-

ration of disaster. These measures can include projects to reduce the risk of

future damage, hardship, or loss or suffering from damages. Buyouts are one

type of eligible mitigation measure. Potential recipients of the grants, which

can cover up to 50 percent of the costs of these activities, must maintain insur-

ance as a condition of receipt.

1988 South Carolina acts to restrict new development along erosion-prone beach-

fronts.

1988 The Casualty Actuarial Society releases a Statement of Principles Regarding

Property and Casualty Insurance Ratemaking. The statement identifies and

describes principles applicable to the determination and review of rates for

property and casualty insurance. The principles provide the foundation for the

development of actuarial procedures and standards that seek to protect the in-

surance system’s financial soundness and to promote equity and availability

for insurance consumers.

1988 The Department of the Interior estimates that not developing 39,000 acres of

developable coastal barrier land proposed to be added to the Coastal Barrier

Resources System (see 10/1982) will save the federal government approxi-

mately $3 billion, which includes subsidies for flood insurance.

1/1989 Two new products, the Condominium Master Policy (CMP) and the Preferred

Risk Policy (PRP), become available for the first time. The CMP provides in-

surance coverage at a significantly reduced cost under a single policy for resi-

dential condominiums with five or more units and three or more stories located

in Regular Program communities. The PRP is available to the owners of one-

to four-family residential buildings located in Regular Program communities

provided the buildings are located outside of SFHA and have favorable flood-

loss histories. The PRP has a new, simplified application form tailored to sev-

eral fixed, limited-coverage combinations.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

2/1989 FIA completes its assessment of future resource requirements, including both

staffing and funding levels, needed to maintain the currency and accuracy of

published NFIP maps. These resource requirements, identified in A Cost Effec-

tive Plan for Flood Studies Maintenance, describe how FIA will move from an

“initial studies” phase to a “maintenance” phase for flood studies and surveys.

5/1989 Through the use of an interim rule, FEMA decides that federal disaster assis-

tance to restore insurable structures in SFHAs will be reduced by the maxi-

mum amount of insurance proceeds that would have been received had a build-

ing and its contents been fully covered by a flood insurance policy. The in-

terim rule is revoked in December 1991.

5/1989 Under the auspices of the Domestic Policy Council’s Working Group on the

Environment, Energy, and Natural Resources, the White House establishes an

Inter-Agency Task Force on Wetlands. One of the group’s primary objectives

is to recommend revisions to existing presidential executive orders on wet-

lands protection and floodplain management (see 5/1977).

6/1989 The Enhanced Actuarial Information System is completed and used for the

first time in conducting the annual review of NFIP rates.

9/1989 Hurricane Hugo strikes, wreaking havoc in the Carolinas, Puerto Rico, and the

Virgin Islands. Buildings that had been built to meet the NFIP’s requirements

for floodplain management performed well, demonstrating the effectiveness of

the requirements in reducing flood damages.

9/1989 The first major test of the Claims Coordinating Office (CCO) system occurs

when a CCO is established to coordinate the assignment of a single adjuster to

handle the wind and flood claims in North and South Carolina. The system

works well and proves that cooperation between windpool and WYO compa-

nies through the CCO benefits insured individuals by simplifying the claims

process with the use of a single adjuster.

10/1989 FIA implements a fee-charge system for certain categories of requestors of the

archival backup for flood insurance studies and restudies. The fee-charge sys-

tem is needed to limit the increasing costs associated with the servicing of

these requests.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

10/1989 Effective October 1, new rules revise the definition of substantial improvement

and, for the first time, define substantial damage. “Substantial improvement”

represents any reconstruction, rehabilitation, addition, or other improvement of

a building, the cost of which equals or exceeds 50 percent of the market value

of the building before the “start of construction” of the improvement. Substan-

tial improvement includes buildings that have incurred “substantial damage,”

regardless of the actual repair work performed. Substantial damage reflects

damage of any origin sustained by a building whereby the cost of restoring the

building to its before-damaged condition would equal or exceed 50 percent of

the market value of the building before the damage occurred.

11/1989 Effective November 1, new rules, which supersede those first implemented in

October 1986, address provisions on the placement of manufactured homes in

existing parks and subdivisions for manufactured homes. The revised rule is

developed after consideration of recommendations by a task force including

representatives of the manufactured home community and of state and local

governments.

11/1989 The National Academy of Sciences completes Managing Coastal Erosion

through the National Flood Insurance Program, a study requested by FIA, to

provide advice on strategies for erosion management, supporting data needs,

and applicable methodologies to administer these strategies through the NFIP.

The study is necessary to determine whether the federal government should be

involved in erosion insurance and, if so, how such a program should be admin-

istered. The question is triggered by the Upton-Jones Amendment (Section 544

of PL 100-242) to the National Flood Insurance Act of 1968 (see 5/1988).

11/1989 The Defense Production Act Amendment of 1989 (PL 101-137), which reau-

thorizes the NFIP, extends the Upton-Jones Amendment (see 5/1988) from

September 30, 1989, through September 30, 1991, and requires FEMA to con-

duct a study to determine the impact of relative sea-level rise on FIRMs. The

study will also project the economic losses associated with estimates of sea-

level rise.

12/1989 FIA produces its first community Flood Risk Insurance Directory (FRID) as a

prototype in conjunction with its program to digitize FIRMs. The FRID was

never adopted because the information is available in the private sector.

Before 1989, FIA had maintained an archive of all effective and all previously

effective NFIP maps in hard-copy paper format. To improve on the archival

system, to reduce the storage required, and to make copies of the archived

maps available to requestors, FIA begins microfilming all NFIP maps.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1989 The Association of State Floodplain Managers’ first formal survey of state and

local programs is completed. Using a standardized reporting form makes it

possible to summarize state floodplain management activities at the end of the

1980s.

3/1990 FIA initiates the first two pilot erosion studies to develop the applicable meth-

odologies and study processes to determine rates of erosion.

FIA institutes a map panel subscription service. This system allows subscribers

to obtain current information on the status of NFIP maps, on a map panel-by-

panel basis.

4/1990 The National Wildlife Federation sues FEMA, claiming that the NFIP facili-

tates development that may result in destruction or adverse modification of

habitat of the key deer, an endangered species found only in the Florida Keys.

The Endangered Species Act requires that all federal agencies ensure that the

actions they authorize, fund, or implement do not jeopardize the continued ex-

istence of endangered species. To ensure compliance with this requirement,

federal agencies must consult with the Secretary of the Interior about how such

actions might affect endangered and threatened species or their critical habi-

tats.

6/1990 C. M. “Bud” Schauerte is nominated to be Federal Insurance Administrator.

8/1990 The GAO reports on compliance with the mandatory flood insurance provision

of the Flood Disaster Protection Act of 1973 (see 12/1973) in Information on

the Mandatory Purchase Requirement. The GAO notes FEMA’s belief that the

level of compliance with the provision is low. In contrast, according to the

GAO, several agencies with responsibility for enforcing the requirement state

that noncompliance is not a major problem. GAO’s own assessment identifies

high levels of noncompliance in parts of the two states it examined, Maine (22

percent) and Texas (79 percent).

8/1990 Wallace E. Stickney is appointed FEMA Director.

9/1990 As of September 30, there are 2.3 million policies and more than $202 billion

of coverage in force.

10/1990 The first financial statement audit of the NFIP that includes the WYO Program

(covering 1986-89) results in an unqualified opinion.

10/1990 The Community Rating System (CRS) begins. Under CRS, discounts on flood

insurance premiums are available in communities that voluntarily initiate ac-

tivities that reduce flood losses or that increase the number of flood insurance

policies.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

10/1990

continued

CRS is the product of three years of development by the Community Rating

Task Force, which had representatives from FIA, the insurance industry, and

state and local floodplain managers. Extensive field testing, critiques, and re-

views with communities, public interest organizations, and the Association of

State Floodplain Management’s technical advisors were conducted by the In-

surance Services Office’s Commercial Risk Services Organization under the

technical directions of the Community Rating Task Force. Four hundred pro-

fessional floodplain managers, 50 public interest organizations, and representa-

tives of over 100 communities reviewed the proposal. CRS is also the subject

of a congressional hearing.

10/1990 Effective October 1, the NFIP introduces new elevation and floodproofing for

nonresidential structures certificates forms. In addition, the NFIP broadens the

definition of a small business so that more businesses can qualify as small

businesses under the program.

11/1990 The Omnibus Budget Reconciliation Act of 1990 (PL 101-508) requires

FEMA to establish a policy fee to cover the administrative expenses, including

salaries, and mapping expenses incurred in implementing the flood insurance

and floodplain management program. The $25 fee (later increased to $30) ap-

plies to all new and renewal flood insurance policies sold after May 31, 1991.

From 1987 to 1991, Congress required all program and administrative costs to

be paid from the National Flood Insurance Fund (see 8/1968) without a com-

mensurate increase in rates. FIA estimates that, as of September 2000, program

assets were reduced by about $485 million because costs were not collected

during these years.

11/1990

The Coastal Barrier Improvement Act of 1990 (PL 101-591) expands the

Coastal Barrier Resources System (established by the Coastal Barrier Re-

sources Act of 1982, see 10/1982) to include units along the Great Lakes,

Puerto Rico, the Florida Keys, the Virgin Islands, and secondary barriers

within large embayments. After a one-year grace period, federal flood insur-

ance will be prohibited in these units as well as in “otherwise protected lands.”

Such public or private lands are held for conservation purposes.

After the law’s passage, the Coastal Barrier Resources System includes ap-

proximately 1,200 miles of coastline and approximately 1,272,000 acres of

undeveloped coastal barriers and associated aquatic habitats.

The Act directs the Secretary of the Interior to establish a Coastal Barriers

Task Force, which would include a representative from FEMA. The task force

is supposed to complete a report by November 1992 that, among other topics,

identifies the number of structures for which flood insurance has not been

available because of the Act. The report is never completed.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

12/1990 Over 18,000 communities now participate in the NFIP. The Engineering Scien-

tific Data Package System has archived almost 10,000 flood insurance studies.

Since 1981, nearly 1,300 existing data studies or existing data restudies were

produced using flooding information generated for other purposes. Since 1983,

FIA has accredited more than 12,000 linear miles of levees that protect against

100-year floods.

1990 FEMA identifies seven states (Colorado, Illinois, Kansas, Missouri, North Da-

kota, Ohio, and Oklahoma) that had zoning exemptions in enabling legislation

for agricultural buildings. Due to these exemptions communities could not en-

act ordinances in compliance with the NFIP. FIA worked with these states to

pass legislation or obtain legal opinions that the communities had the authority

to enact ordinances on floodplain management.

1/1991 The Mortgage Portfolio Protection Program (MPPP) begins. This voluntary

program allows lenders to bring their portfolios into compliance with the re-

quirements for the purchase of flood insurance. Any insurance purchased

through this program would occur only if the mortgagor property owner does

not respond to all the notices the program requires. Lenders participating in the

MPPP can purchase policies (or “force place” required insurance coverage) at

special high rates, reflecting the uncertainty as to the degree of risk due to the

limited underwriting data required. Policies under the MPPP can be purchased

only from WYO companies participating in the MPPP. Further, these policies

can be purchased only as a last resort for properties that are part of a lending

institution’s mortgage portfolio. The property must be located within a SFHA

of a community participating in the NFIP and not be covered by a policy even

after required notices have been given to the mortgagor property owner by the

lending institution of the requirement for obtaining and maintaining such cov-

erage.

3/1992 The Corps of Engineers publishes a revised Flood-Proofing Regulations.

7/1992 In Coastal Barriers: Development Occurring Despite Prohibitions against

Federal Assistance, the GAO concludes that development continues on previ-

ously undeveloped barrier islands despite restrictions in the Coastal Barrier

Resources Act (PL 97-348) on the issuance of flood insurance for structures on

such islands. Equally important, the study finds that nearly 10 percent of resi-

dences in these areas have flood insurance coverage even though coverage is

not supposed to be provided in these areas.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

9/1992 In reviewing FEMA’s adherence to its policies for updating flood maps, the

agency’s Office of Inspector General finds that FEMA does not consistently

adhere to policies to ensure that restudies yielding the most benefits are per-

formed first or use a standard set of criteria to choose maps to digitize. In addi-

tion, the Inspector General notes that FEMA provides information on commu-

nities to map users in five ways, with the result that the information from the

different sources may conflict and lead to incorrect or unneeded flood insur-

ance policies. FEMA generally agrees to implement the recommendations as-

sociated with the audit’s findings.

10/1992 Section 928 of the Housing and Community Development Act of 1992 (PL

102-550) legislates a flood-control restoration zone (AR) as a result of the de-

certification of the levee systems of Los Angeles and Sacramento, California.

The Act makes certain insurance and development benefits available in areas

where a federal flood-control system will be restored.

1992 A survey of state NFIP coordinators by the Association of State Floodplain

Managers identifies an increase in state activities and state participants. The

survey notes that many states participate in activities to restore and preserve

the natural and cultural resources of floodplains and that many identify the en-

vironmental benefits of floodplain management as the key to obtaining wide

public support. The survey reports that 39 states have more than 175 full-time

equivalent personnel.

1992 The Federal Interagency Floodplain Management Task Force publishes its

two-volume Floodplain Management in the United States: An Assessment Re-

port. Key topics include individual risk awareness; migration to water; flood-

plain losses; short-term economic returns; enhanced knowledge and technol-

ogy; national standards for flood protection; limited governmental capabilities;

the need for interdisciplinary approaches; application of mitigation measures;

the effectiveness of mitigation measures; the role of disaster relief; and na-

tional goals and resources. The report concludes that it is difficult to assess the

effectiveness of floodplain management, observing that “there are few clearly

stated, measurable goals,” and that “there is not enough consistent reliable data

about program activities and their impacts to tell how much progress is being

made in a given direction.”

2/1993 In Coping with Catastrophe: Building an Emergency Management System to

Meet People’s Needs in Natural and Manmade Disasters, the National Acad-

emy of Public Administration concludes that, in light of the devastation caused

by Hurricane Andrew in south Florida in 1992, FEMA has not successfully

integrated its many missions. In the report’s words, “FEMA has been ill-served

by congressional and White House neglect, a fragmented statutory charter, ir-

regular funding, and the uneven quality of its political executives appointed by

past presidents.”

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

4/1993 A U.S. District Court in Key West, Florida, hears the National Wildlife Fed-

eration’s complaint (see 4/1990) that the NFIP facilitates development in the

Florida Keys that may jeopardize the continued existence of the key deer, an

endangered species. In response, FEMA states that implementation of the

NFIP is not an action subject to the consultation requirements of the Endan-

gered Species Act.

6/1993 The Great Midwest Flood of the upper Mississippi and lower Missouri River

basins from mid-June through early August provide evidence that the nation

has not yet reached an accommodation between nature’s periodic need to oc-

cupy her floodplains and the present human occupancy and use. The floods

generated the highest flood crests ever recorded at 95 measuring stations.

President Clinton declares 505 counties in nine states to be federal disaster ar-

eas. Estimates of the total damage are as high as $16 billion. Only about one in

ten of affected structures have flood insurance.

Various sources attempt to assign recurrence intervals (e.g., a “500-year”

flood) to the flood, but they are subject to considerable error due to the flood’s

complex and widespread nature, the short historic data record on which to base

an analysis, changing observation methods, and the difficulty in assigning flow

rates and elevations to past historic events. Stanley Changnon edits a compre-

hensive evaluation of this flood, The Great Flood of 1993: Causes, Impacts

and Responses, which is published in 1996.

Four broad issues are examined as a result of this flood: a) whether to repair or

reconstruct the hundreds of damaged flood-control levees (or other struc-

tural/protective measures in future floods) and who would pay for permitted

repairs; b) whether to permit repair or rebuilding of thousands of substantially

damaged structures so they could again be inhibited; c) whether to commit

community planning and financial assistance to develop alternative mitigation

strategies to the typical repair/rebuild scenario; and, d) whether to use the ex-

perience of risk insurance as a mitigation tool.

8/1993 To study the “levee issue” resulting from damage caused by the 1993 floods

and to facilitate the search for appropriate alternatives, the Office of Manage-

ment and Budget issues guidance to assess strategies for levee reconstruction.

Representatives from five federal agencies, state and local governments, and

other interested organizations consider alternatives to levee repair that would

provide the benefits of flood control and protect natural resources. The com-

mittee affects decisions not to rebuild a few levees, but its overall impact is not

felt until other post-flood recovery situations such as in California in 1995.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

9/1993 The National Performance Review finds that the provision of federal disaster

assistance is too generous and too frequent, with the possible result that the

federal government may be perceived as the states’ “first-line resource in every

emergency.” Echoing past recommendations (see 1/1981, for example), the

Review urges the development of objective criteria to replace “political fac-

tors” in decisions about disaster declarations.

11/1993 In response to the criticisms contained in Coping with Catastrophe, FEMA

reorganizes its 2,500 employees into five directorates, two administrations (the

Federal Insurance Administration and the U.S. Fire Administration), and 10

regional offices.

12/1993 Due to extensive flooding during the previous fiscal year, the NFIP experi-

ences losses that are more than twice its historic loss level and must borrow

$100 million from the Department of Treasury to meets its needs for cash. This

is the first time such borrowing has been necessary since 1984. The borrowed

funds are repaid in FY 1994.

12/1993 The “Volkmer Amendment” in the Hazard Mitigation and Relocation Assis-

tance Act of 1993 (PL 103-181) amends the 1988 Stafford Act (see 11/1988)

to increase federal support for relocating flood-prone properties and to increase

the amount of hazard-mitigation funds available after a disaster to 15 percent

of all of FEMA’s appropriated federal disaster funds, up from 10 percent of a

portion of FEMA’s funds dedicated to community assistance disaster funding

for relocation or hazard-mitigation activities. The Act also increases to 75 per-

cent from 50 percent, effective June 10, 1993, the share of the costs of mitiga-

tion activities the federal government will cover; clarifies acceptable condi-

tions for the purchase of damaged homes and businesses; requires the complete

removal of such structures; and dictates that the purchased land be dedicated

“in perpetuity for a use that is compatible with open space, recreational, or

wetlands management practices.”

1/1994 The Executive Office of the President, through the Administration Floodplain

Management Task Force, assigns a broad mandate to the Federal Interagency

Floodplain Management Review Committee to delineate the causes and conse-

quences of the 1993 Midwest flooding and evaluate the performance of exist-

ing programs for floodplain and related watershed management.

The committee observes that “in the Midwest, the NFIP tends to discourage

floodplain development through the increased costs in meeting floodplain

management requirements and the cost of an annual flood insurance premium,

although this may not be the case elsewhere in the nation.”

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1/1994

continued

The committee’s report provides an opportunity for “a blueprint for change” in

the nation’s programs and policies affecting its coastal and riverine flood-

plains. The committee makes several recommendations including changes in

federal policies, programs, and activities that will most effectively achieve risk

reduction, economic efficiency, and governmental enhancement in the flood-

plain and related watersheds. In all, there are 93 recommendations to be used

as “a blueprint for the future.”

3/1994 The GAO issues Flood Insurance: Financial Resources May Not Be Sufficient

to Meet Future Expected Losses. The report notes that income from insurance

premiums is not sufficient to build reserves to meet expected flood losses.

Consequently, the GAO concludes that losses from claims and the program’s

expenses will exceed the funds available to the program in some years.

4/1994 FEMA issues a proposed rule in response to the Housing and Community De-

velopment Act of 1992, which created a flood-control restoration zone (AR)

designed to meet communities’ concerns. The AR designation recognizes that

a system for flood protection is being restored to provide protection during the

base flood event and during the restoration period and reduces the costs of

flood insurance and elevation requirements while still providing some level of

protection for properties that will be exposed to the increased risks of flooding

during the restoration period.

6/1994 The Interagency Floodplain Management Review Committee, given the re-

sponsibility for conducting a comprehensive review of floodplain management

after the Midwest floods of the previous year, publishes Sharing the Chal-

lenge: Floodplain Management Into the 21st Century (sometimes referred to

as the “Galloway Report,” after the committee’s chair, Gerald E. Galloway,

Jr.). The report recommends a sharing of responsibility for floodplain man-

agement among federal, state, and local officials and for restrictions on devel-

opment in floodplains.

With respect to flood insurance, the Committee criticized the limited penetra-

tion of the program in communities affected by the Great Midwest Flood of

1993 (see 6/1993). Repeating the warning of the National Performance Review

(see 9/1993), the Galloway report notes that overly generous federal disaster

assistance has the potential to reduce individuals’ responsibility to protect

themselves against disasters.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

6/1994

continued

In addition, the report notes that the five-day waiting period between the time

of purchase of a flood insurance policy and when coverage is effective allowed

many people to purchase insurance with the knowledge that they would be

flooded in the summer of 1993. If the waiting period had been 30 days, nearly

4,000 fewer insurance claims would have qualified, and payments would have

been $82 million less. The committee thus recommended that the waiting pe-

riod be increased to 15 days.

9/1994 The Community Development and Regulatory Improvement Act (PL 103-

325), the National Flood Insurance Reform Act of 1994, includes the most

comprehensive changes to the NFIP since the Flood Disaster Protection Act’s

approval in 1973.

Subtitle B provisions include a nonwaiver of the requirement that flood insur-

ance be purchased by recipients of federal disaster assistance; expand require-

ments for lenders when making loans and requiring that coverage be main-

tained over the life of the loan; require escrow of flood insurance payments if

escrows are already required; require placement of flood insurance by lenders

if a borrower fails to obtain the necessary coverage; impose penalties for fail-

ure to require flood insurance or notify borrowers; impose fees for determining

the applicability of flood insurance purchase requirement; establish notice re-

quirements for properties located in a SFHA and a change in loan servicer; and

require standard hazard determination forms.

Subtitle C codifies the Community Rating System and directs that credits may

be given to communities that implement measures to protect natural and bene-

ficial floodplain functions and manage erosion.

Subtitle D includes provisions to repeal the flood-property purchase and loan

program (Section 1362); terminate the erosion-threatened structures program

(Upton-Jones Amendment; see 5/1988 and 11/1989); establishes a Mitigation

Assistance Program, which replaces the Upton-Jones acquisition/demolition

program, to provide grants to states and communities based on a 75/25-percent

cost share for mitigation plans and projects; creates the National Mitigation

Fund; and provides additional coverage for compliance with land-use and con-

trol measures.

Subtitle E establishes the Flood Insurance Interagency Task Force (Section

561(a)) and the Task Force on Natural and Beneficial Functions of the Flood-

plain. The Flood Insurance Interagency Task Force is directed to conduct a

number of studies addressing the programs and procedures of Federal agencies

and corporations for compliance with NFIP regulations, and to submit a report

of findings and conclusions to Congress.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

9/1994

continued

Subtitle F increases the maximum coverage amounts available and includes a

requirement to review and assess the need to update and revise FIRMs every

five years; establishes a Technical Mapping Advisory Council; requires a

study of the economic impacts of erosion-hazard areas; requires an economic

impact study of the effect of charging actuarial rates for pre-FIRM properties;

increases the waiting period for flood insurance policies to 30 days (see

6/1994); adds provisions regarding agricultural structures; and prohibits disas-

ter assistance to individuals in a SFHA who received disaster assistance and

did not maintain flood insurance.

9/1994 In an Audit of FEMA’s Mitigation Programs, FEMA’s Inspector General con-

cludes that a lengthy application process, due primarily to the significant de-

lays in the process for determining project eligibility, hampers the agency’s

implementation of the Hazard Mitigation Grant Program (see 11/1988). In the

audit’s words, “The criteria for determining environmental impact, cost effec-

tiveness and whether projects represent a long-term solution are especially

confusing.” In addition, the audit concludes that “there are no mechanisms to

measure the effectiveness of mitigation in any of FEMA’s programs, and man-

agers have neither the qualitative tools nor resources.”

10/1994 FIA issues a newly revised Agent Flood Insurance Manual.

11/1994 Given the gravity of the 1993 Midwest flood and because less than 15 percent

of the nonfederal levees that were damaged qualified for repair consideration

under the Corps of Engineer’s emergency flood-control repair program, Con-

gress provides supplemental funding for repair of levees. Under the authority

of PL 84-99, the Corps of Engineers rehabilitate the 115 levees already eligible

under its program and another 241 nonfederal levees using supplemental fund-

ing. In total, repairs cost $230 million.

12/1994 The number of flood insurance policies in force exceeds three million for the

first time.

12/1994 A report issued by the U.S. House of Representatives Bipartisan Natural Disas-

ters Task Force concludes that the federal government’s generosity with disas-

ter assistance diminishes the incentives for state and local governments “to

spend scare state and local resources on disaster preparedness, mitigation, re-

sponse, and recovery. This not only raises the costs of disasters to federal tax-

payers, but also to our society…as people are encouraged to take risks they

think they will not have to pay for.”

The Task Force recommends the creation of a “private, naturally based all-

hazard insurance program, in consultation with the insurance industry…for

residential and commercial property.”

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1994 A revised Unified National Program for Floodplain Management is published.

In the report, the Federal Interagency Floodplain Management Task Force rec-

ommends four broad goals for a Unified National Program. These are to: for-

malize a national goal-setting and monitoring system; reduce by at least half

the risks to life and property and the risks to natural resources of the nation’s

floodplains; develop and implement a process to “encourage positive attitudes

toward floodplain management;” and establish a nationwide, in-house capabil-

ity for floodplain management.

The report, submitted to Congress on March 6, 1995, also identifies objectives

necessary to achieve each goal and establishes target dates for completing

them.

1994 The Federal Interagency Floodplain Management Task Force, with funding

from the Environmental Protection Agency and the Corps of Engineers, pub-

lishes a guidebook for community officials and other interested parties to aid

in developing local programs to protect and restore important floodplain re-

sources and functions. Protecting Floodplain Resources: A Guide for Commu-

nities provides information on methods to mitigate flood hazards to preserve

the integrity of natural systems.

1994 The Association of State Floodplain Managers produces National Flood Pro-

grams in Review, 1994, the Association’s first comprehensive effort to assess

national programs and policies related to floodplain management.

1994 Elaine A. McReynolds is appointed Federal Insurance Administrator.

1994 In Florida Key Deer v. Stickney, 864 F. Supp. 1222 (S.D. Fla. 1994), a U.S.

District Court rules that FEMA must comply with the requirements of the En-

dangered Species Act and consult with the Department of the Interior regard-

ing the possible impacts of development by flood insurance on the key deer,

and endangered species (see 4/1990 and 4/1993).

1/1995 As a result of an Audit of the Accuracy of Flood Zone Ratings, FEMA’s In-

spector General finds that zone misreadings occurred in more than one-quarter

of all flood insurance policies and that premiums were incorrect for 10 percent

of the policies sampled. The audit also notes that FEMA’s flood maps are dif-

ficult to read, that the rules for writing policies are more complex than for most

other forms of insurance, and that FEMA does not have a program for quality

control to verify that insurance agents use the correct rating factors (such as

flood zone, elevation, or pre- or post-FIRM status) to calculate premiums.

FEMA accepts the findings, but does not act to implement the report’s recom-

mendations, at least through the end of 1999.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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2/1995 Retroactive to September 23, 1994, (the date President Clinton signed PL 103-

325, the National Flood Insurance Reform Act), all applicants for Individual

and Family Grants (IFG) who receive federal disaster assistance are required to

purchase and maintain flood insurance on the flooded property until they move

to another address. Failure to maintain the insurance will preclude receipt of

any subsequent disaster assistance through the IFG program.

2/1995 FEMA publishes in the Federal Register the first compendium that lists all

revisions and amendments made to flood maps between October 1, 1994, and

December 31, 1994. Subsequent compendia are published in the Federal Reg-

ister every six months.

3/1995

Federal Disaster Assistance, Report of the Senate Bipartisan Task Force on

Funding Disaster Relief (U.S. Senate Doc. No 104-4) concludes that Congress

should improve financial preparedness for catastrophic events. The report

notes that between FY 1977 and 1993, the federal government spent $64 bil-

lion in direct disaster relief and $55 billion indirectly through low-cost loans.

Congress does not act on the recommendations. The Task Force recommends:

a) clarification of criteria for declarations of disasters; b) improved incentives

for mitigation; and c) greater dependence on insurance. The Senate Task Force

does not support the recommendations of the House Bipartisan Natural Disas-

ters Task Force (see 12/1994) regarding all-hazard insurance.

3/1995 FIA proposes the creation of Group Flood Insurance Policies (GFIP). Such

policies, intended for low-income recipients of flood-related disaster assistance

through the NFIP’s Individual and Family Grant Program (see 2/1995), will

provide three years of flood insurance, with the federal (75 percent) and state

governments (25 percent) sharing the cost of the premiums. At the end of the

three-year period, each GFIP recipient will be required to purchase and main-

tain a standard flood insurance policy. Coverage on that property must be con-

tinued as long as the property exists.

3/1995 In response to the National Flood Insurance Reform Act of 1994, FEMA in-

creases the waiting period to 30 days from 5 days before flood insurance cov-

erage becomes effective. Two exceptions are possible: when the initial pur-

chase of flood insurance is in connection with the making, increasing, exten-

sion, or renewal of a loan and when the initial purchase of flood insurance oc-

curs during the one-year period following notice of the issuance of a revised

FIRM for a community.

7/1995 Effective July 1, the NFIP introduces provisional ratings for policies that re-

quire an elevation certificate when it is not yet available. The NFIP begins ac-

cepting credit cards as a means of paying insurance premiums.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

7/1995 The Corps of Engineers publishes Floodplain Management Assessment of the

Upper Mississippi River and Lower Missouri Rivers and Tributaries. Among

its findings, the Corps determines that structural flood protection prevents sig-

nificant damage, that restoration of floodplain wetlands would have had little

impact on floods the size of those in 1993, and increased reliance on flood in-

surance better ensures appropriate responsibility for flood damage.

7/1995 FEMA’s Inspector General issues an Audit of the Enforcement of Flood Insur-

ance Purchase Requirements for Disaster Aid Recipients. The audit finds that

individual recipients of flood-related disaster assistance, who are required to

purchase and maintain flood insurance if their flood-damaged property is in-

surable and within a SFHA, often do not do so (see 9/1994). Low levels of

compliance are found even though grants through the Individual and Family

Grant Program include funds for the first year’s premium.

Similarly, the audit notes “very low” levels of compliance with the mandatory-

purchase requirement among recipients of grants from FEMA’s Public Assis-

tance Program. Such grants provide funds for the repair of state and local gov-

ernments’ facilities. Recipients of Public Assistance funds must purchase flood

insurance if their flood-damaged property is insurable and if their grant is over

$5,000, regardless of whether the property is in a SFHA if insurance is rea-

sonably available, adequate, and necessary.

9/1995 Due to extensive flooding during the previous 12 months, the NFIP experi-

ences losses that are much higher than the historic loss level and must borrow

$265 million from the Department of Treasury to meets its needs for cash.

10/1995 The NFIP’s “Cover America” campaign begins. The campaign represents a

nationwide effort to increase public awareness of the perils of flooding and the

desirability of purchasing flood insurance.

12/1995 FEMA issues The National Mitigation Strategy: Partnerships for Building

Safer Communities. The document emphasizes two key goals, increasing pub-

lic awareness of the risks associated with natural hazards and significantly re-

ducing the loss of life, injuries, economic costs, and disruption of families and

communities due to natural hazards.

1995 A survey of states by the Association of State Floodplain Managers describes

trends since 1992 that have reversed some of the continuous advances made

since the late 1960s. According to the survey, state programs face challenges

in budget, organization, and authority that threaten their ability to be full, ac-

tive partners with the federal government and local communities in reducing

flood losses. The report concludes that states’ capabilities have eroded because

of legislative dilution, budgetary restrictions, and organizational dissection.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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1/1996 Federally regulated lenders, federal agency lenders, and government-sponsored

enterprises are henceforth required to use the Standard Flood Hazard Determi-

nation Form. This form is used to determine whether real property offered as

collateral for a loan is located in a SFHA.

2/1996 President Clinton promotes FEMA’s director to cabinet status.

4/1996 Effective April 30, the NFIP revises the standard flood insurance application

and endorsement forms and makes them available through ACORD, a non-

profit association that develops and maintains communication standards for the

insurance industry.

5/1996 FEMA initiates the use of Group Flood Insurance Policies (see 3/1995). Such

policies help disaster victims located in a SFHA who do not qualify for loans

from the Small Business Administration comply with flood insurance purchase

requirements. The first such policies are issued in August 1996.

8/1996 Federal regulators of financial institutions issue a joint rule on August 29 to

implement the provisions of the National Flood Insurance Reform Act of 1994.

The rule is intended to achieve uniformity among these regulators on the sub-

stantive and procedural requirements of the act. These regulations become ef-

fective on October 1, 1996.

9/1996 FEMA exempts several categories of projects funded through the Stafford

Act’s Hazard Mitigation Grant Program (see 11/1988) from the use of a bene-

fit-cost analysis due to the difficulty in quantifying known project costs and

the time involved in gathering data. Exempted activities include those in which

the cost of restoring damaged structures equals or exceeds 50 percent of the

structures’ market value and the structures are located in a 100-year floodplain.

9/1996 In response to Section 541 of the National Flood Insurance Reform Act of

1994, FEMA submits The Community Rating System of the National Flood

Insurance Program to Congress. The section requires FEMA to submit a re-

port on the rating system to Congress every two years. Such reports are re-

quired to analyze the program’s cost effectiveness, accomplishments, or short-

comings, and to provide recommendations for legislation.

9/1996 Due to extensive flooding during the past 12 months, the NFIP experiences

losses that are much higher than its historic loss levels and must borrow funds

from the Department of Treasury to meets its needs for cash. The total amount

borrowed reaches $626 million. The NFIP borrows an additional $192 million

over the next six months.

10/1996 Congress approves a supplemental request (reflected in PL 104-208) to in-

crease the NFIP’s borrowing authority (see 9/1996) for FY 1997 to $1.5 billion

from $1 billion.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

10/1996 Federally regulated lending institutions and government-sponsored enterprises

(GSE) that purchase mortgages are required, effective October 1, to escrow

premiums for flood insurance for properties located in floodplains. If a feder-

ally regulated lender or GSE determines that a property in a SFHA does not

need flood insurance, such insurance can be “force placed” at the borrower’s

expense.

10/1996 The Federal Financial Institutions Examination Council (FFIEC) implements

revised examination procedures for flood insurance in response to the new

mandatory purchase requirements of the National Flood Insurance Reform Act

of 1994 (see 9/1994).

12/1996 FEMA issues interim guidance for determining the cost-effectiveness of haz-

ard-mitigation projects entitled How to Determine Cost-Effectiveness of Haz-

ard Mitigation Projects: A New Process for Expediting Application Reviews.

The new guidelines declare that benefit-cost analysis should be used for all

cost-effectiveness determinations.

12/1996 Through its Innovations in American Government program, Harvard Univer-

sity’s School of Government recognizes FEMA for its Consequent Assessment

Tool Set (CATS), which enables the agency to predict the likely consequences

of an impending disaster and then to rapidly mobilize an appropriate response.

12/1996 FEMA creates an Insurance Task Force to develop recommendations for the

reform of its Public Assistance program (see 11/1988 and 7/1995). The Flood

Disaster Protection Act of 1973 required the NFIP to identify, by June 30,

1974, all communities that contain areas at risk for serious flood hazard and to

notify these communities that they can apply for participation in the NFIP or

forego their eligibility for certain types of federal assistance in their flood-

plains (see 12/1973).

1996 The Association of State Floodplain Managers establishes an executive office

in Madison, Wisconsin. The Association has catalogued more than 700 publi-

cations, which are housed at the National Floodplain Management Resource

Center at the University of Colorado.

1996 Gerald Galloway declares “the flood [the 1993 upper Mississippi and lower

Missouri River basins flood] is over. No one now cares,” in his remarks to the

Association of State Floodplain Managers Annual Conference and printed in

National Flood Policy: Progress Since the 1993 Floods.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1/1997 FEMA’s Insurance Task Force issues Insurance Regulations, Review, Analy-

sis, and Recommendations. The report focuses attention on FEMA’s Public

Assistance program and recommends that: a) insurance deductibles not be eli-

gible for FEMA funding; b) FEMA establish a policy requiring actual proof of

insurance rather than an insurance commitment, before funding is provided; c)

FEMA should develop clear regulations to minimize opportunities for misin-

terpretation of these regulations among FEMA’s regional offices; and d) the

authority of state insurance commissioners to waive insurance requirements for

public facilities be revoked. In lieu of these commissioners being allowed to

grant waivers, the report encourages input from them as to the availability,

adequacy, and necessity of insurance. Under no circumstances, however,

should the requirement be waived because of affordability, at least according

to the report.

3/1997 FEMA issues a Report on Costs and Benefits of Natural Hazard Mitigation,

which reviews the benefits of mitigation measures. Among the report’s 16 case

studies are three related to floods: a) the acquisition and relocation of flood-

plain structures in Missouri; b) land-use and building regulations along Flor-

ida’s coasts; and c) land-use and building requirements in floodplains.

3/1997 The Flood Insurance Interagency Task Force submits an interim report to Con-

gress providing details on surveys, studies, and research underway to complete

the tasks directed by Title V of the National Flood Insurance Reform Act of

1994 (see 9/1994).

5/1997 To consider and implement the recommendations in the 1994 report, A Unified

National Program for Floodplain Management, FEMA convenes a group of

about 40 experts at the annual conference of the Association of State Flood-

plain Managers in Little Rock, Arkansas and prepares a report on the forum.

6/1997 Mandated by the National Flood Insurance Reform Act of 1994, Increased

Cost of Compliance (ICC) coverage is included in all new and renewed flood

insurance policies effective on or after June 1, 1997. This coverage helps to

cover the costs of bringing flood-damaged homes and businesses into compli-

ance with community floodplain ordinances. The coverage limit of $15,000

helps to pay for elevating, flood proofing, demolishing, or relocating a struc-

ture that has been substantially or repetitively damaged by flooding. ICC cov-

erage is available only in communities that adopt and enforce substantial-

damage or repetitive-loss provisions in their floodplain management ordi-

nances and require action by property owners.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

9/1997 In accordance with the Government Performance and Results Act (PL 103-62),

FEMA issues its first strategic plan, Partnership for a Safer Future. The plan

delineates FEMA’s mission statement, which is to reduce future loss of life

and property through timely delivery of assistance intended to help communi-

ties restore damaged services and rebuild facilities. According to the plan,

FEMA seeks to reduce, by FY 2007, the risk of loss of life and injury from

natural hazards by 10 percent and the risk of property loss and economic dis-

ruption from such hazards by 15 percent.

9/1997 Due to continuing flood-related losses that exceed historical averages, the

value of the Department of the Treasury’s loans to the NFIP reach $917 mil-

lion (see 9/1995 and 9/1996).

10/1997 FEMA publishes a final rule on AR Zones. The rule establishes an AR zone or

area of special flood hazard that results from the decertification of a previously

accredited flood protection system that is determined to be in process of being

restored to provide base flood protection.

10/1997 FEMA begins “Project Impact,” an effort to protect against the impact of natu-

ral disasters before they happen. The project seeks to build disaster-resistant

communities through public-private partnerships and includes a national pub-

lic-awareness campaign; the designation of pilot communities; and an outreach

effort to community and business leaders. FEMA will encourage communities

to assess the risks they face, to identify their vulnerabilities, and to take steps

to prevent disasters.

The first three pilot communities include Deerfield Beach, Florida; Pasca-

goula, Mississippi; and Wilmington, North Carolina. Others are in California,

Maryland, Washington, and West Virginia. FEMA’s goal is to have at least

one Project Impact community in every state by September 30, 1998.

Congress appropriates $30 million for Project Impact for FY 1998 and $25

million for the following fiscal year.

10/1997 FEMA announces that benefit-cost analyses will not be required for hazard

mitigation planning projects associated with disasters that occurred before June

10, 1993.

11/1997 In Modernizing FEMA’s Flood Hazard Mapping Program, FEMA describes

its plans to modernize its flood-hazard maps, of which there are about 100,000

map panels. The program’s purpose is to increase public awareness and the

maps’ accuracy, utility, and production. Approximately 45 percent of the cur-

rent maps are at least 10 years old, and 70 percent are five years or older. Con-

sequently, many of the maps are inaccurate and portray analyses that are out-

dated.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

11/1997

continued

FEMA estimates the cost of implementing its new program at $901 million (in

addition to the $46 million spent in 1997) over seven years. FEMA believes

that the plan will avoid approximately $26 billion in flood damages to new

buildings over a 50-year period.

12/1997 In response to Section 577 of the National Flood Insurance Reform Act of

1994, FEMA completes a process of mapping erosion hazards in 27 coastal

counties in 18 states.

1997 The Association of State Floodplain Managers establishes a foundation to “at-

tract funds that support, through education, training and public awareness, pro-

jects and programs that will lead to the wise management of our nation’s

floodplains.”

1997 The Presidential Long Term Recovery Task Forces (for the 1997 Red River

floods) are established. These task forces operate at a higher administrative

level and are more visible than FEMA’s mitigation process. Recovery and

mitigation become increasingly integrated.

1997 FEMA awards a contract to evaluate the NFIP’s underwriting and loss adjust-

ment process. This subsequent report provides recommendations to improve

the operation of the NFIP by identifying practical changes to the underwrit-

ing/rating and claims processes. The NFIP’s requirements and controls (and

compliance with them) are found to be adequate to ensure effective manage-

ment of the program. The report also notes areas for improvement.

1997 FEMA awards a contract to investigate alternative financing arrangements for

the NFIP. A stochastic model is developed to estimate the NFIP’s financing

costs over a ten-year period using eight alternative financing scenarios. Four

commercial and four governmental financing scenarios are simulated, and the

total cost of each is projected.

1/1998 FEMA initiates the Repetitive Loss Task Force to develop a strategy to address

the NFIP’s repetitive loss problem.

3/1998 The American Society of Civil Engineers releases its 1998 Report Card for

America’s Infrastructure and declares that “an alarming number of dams

across the country are showing signs of age and lack of proper mainte-

nance….Dam safety officials estimate that thousands of dams are at risk of

failing or are disasters waiting to happen.”

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

3/1998

FEMA’s Office of Inspector General issues Review of FEMA’s Implementation

of Insurance Requirements in the Public Assistance Program. The report rec-

ommends that FEMA clarify its regulations governing the conditions under

which state insurance commissioners issue waivers of insurance requirements

for recipients of Public Assistance grants.

As a condition of receiving a Public Assistance grant, FEMA requires that ap-

plicants purchase and maintain insurance on property damaged in a disaster

(see 11/1988, 1/1997, and 7/1995). The amount of insurance applicants must

purchase is equal to the cost of repairs to the property. In addition, insurable

structures located in a SFHA must be insured if they have been damaged in

previous disasters. These requirements are designed to reduce the need for fu-

ture disaster assistance. In lieu of a commitment to purchase insurance, an ap-

plicant can obtain a waiver from a state insurance commissioner. The commis-

sioner can waive the requirement if it is determined that the required insurance

is not reasonably available, adequate, and necessary.

The Inspector General’s report notes that FEMA has not provided an interpre-

tation of what is reasonable, with the consequence that many waivers are

granted because insurance commissioners decide that suitable coverage is not

affordable. In such instances, FEMA has a substantial uninsured investment

since it is the primary insurer.

3/1998 In a separate report, Improvements Are Needed in the Hazard Mitigation Buy-

out Program, the Office of Inspector General questions FEMA’s decision to

exempt certain categories of activities from the requirement that mitigation

activities be cost-effective, as determined through the use of cost-benefit

analysis. The report also notes that FEMA lacks an analytical basis for exempt-

ing such projects.

5/1998 On May 1, the NFIP increases the standard deductibles for building and con-

tents coverages for subsidized policies to reduce the subsidy levels through

means other than rate increases. Other program changes include: new eligibil-

ity requirements for Preferred Risk Policies based on the flood history of the

property regardless of ownership, implementation of new AR zones, and de-

tailed procedures for detailed procedures for determining eligibility for NFIP

insurance in areas of the Coastal Barrier Resources Systems.

6/1998 The National Flood Determination Association (NFDA) incorporates itself.

The NFDA, a national non-profit organization, promotes the interest and suc-

cess of companies involved in making, distributing, and reselling flood zone

determinations.

9/1998 FEMA initiates a nationwide Call for Issues. Through this activity FEMA re-

quests comments on all facets of the NFIP from its partners and customers in

an effort to improve the program’s effectiveness.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

9/1998 The Flood Insurance Interagency Task Force submits its final report to Con-

gress on Enforcement and Compliance Procedures Necessary to Carry Out the

Provisions of the National Flood Insurance Reform Act. The Task Force re-

ports on its development of a compliance model checklist, a catalog of compli-

ance assistance materials, and a list of “best practices” for federal agencies and

Government Sponsored Enterprises (GSEs). The report finds that a reasonable

degree of standardization of enforcement exists within the federal agencies and

GSEs.

9/1998 Five cities in southern California file a lawsuit in U.S. District Court in which

they claim that FEMA’s delineation of a flood control restoration zone (Zone

AR) violates the National Environmental Policy Act and Executive Order

12898, “Federal Actions to Address Environmental Justice in Minority Popula-

tions and Low-Income Populations.” The cities allege that the zone’s designa-

tion and the requirements it imposes will have a substantial negative impact of

their residents’ ability to use their land, on the environment, and on minority

and low-income populations.

10/1998 The Partnership for Response and Recovery, under a FEMA contract, issues

Analysis of Public Assistance Proposed Insurance Regulation Changes, which

estimates the potential cost reductions of proposed changes in insurance regu-

lations and the Stafford Act’s Public Assistance grants (see 11/1988, 7/1995,

1/1997, and 3/1998).

10/1998 In response to Section 541 of the National Flood Insurance Reform Act of

1994, FEMA completes and submits to Congress An Evaluation of the Na-

tional Flood Insurance Program’s Community Rating System. The report notes

that 894 communities, representing 66 percent of all policyholders, participate

in CRS (see 10/1990 and 9/1994). Tulsa, Oklahoma, and Sanibel Island, Flor-

ida, are the two-best rated CRS communities.

11/1998 FEMA’s director, James Lee Witt, announces a series of proposals to reduce

disaster losses by half in three years and to save nearly $1 billion over 10

years. If adopted, the first proposal would prohibit the purchase of flood in-

surance by homeowners who have filed two or more claims that total more

than the value of their home and who refuse to elevate their home or to accept

a buyout. At present, there is no limit to the number of claims made by prop-

erty owners who suffer repetitive damage from floods.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

11/1998

continued

The second proposal would require that public buildings be insured to 80 per-

cent of their replacement value within two years. Although the 1988 Stafford

Act requires states and local communities to insure public buildings, FEMA’s

regulations require only that the amount of insurance to be purchased must be

at least up to the amount of eligible damage under the Public Assistance pro-

gram (see 11/1988, 7/1995, 1/1997, and 3/1998). If the eligible damage is less

than the building’s replacement value, and if the corresponding minimal levels

of insurance can be purchased, this can result in vastly underinsured buildings.

Existing regulations do not indicate whether the insurance must provide cover-

age for a building’s actual cash value or its replacement cost and do not ad-

dress deductibles. Consequently, the current regulations do not include any

incentive to encourage insurance on public buildings that have benefited from

disaster assistance.

1998 FIA estimates that approximately 1.7 million homeowners (or 38 percent) with

a mortgage in a SFHA do not have flood insurance.

1998 The National Wildlife Federation publishes Higher Ground: A Report on Vol-

untary Property Buyouts in the Nation’s Floodplains describing efforts to re-

store floodplains through voluntary buyouts of property in high-risk areas. The

report analyzes repetitively flooded properties and discusses the history of

buyout programs in the United States and the 1993 Midwest flood. Most im-

portant, the report concludes that the NFIP is not actuarially sound and that its

premiums are insufficient to generate the funds needed to cover flood insur-

ance payments.

1998 JoAnn Howard is appointed Federal Insurance Administrator.

1/1999 The Association of State Floodplain Managers supports the creation of state

floodplain management associations and encourages their chapter membership.

As of 1999, 12 states enjoyed chapter membership. Several other states formed

associations, with many working toward chapter status.

1/1999 FIA uses findings from an evaluation of the “Cover America” campaign to de-

velop the “Cover America II” campaign.

1/1999 FEMA, working with the Public Risk Management Association, conducts a

series of regional meetings of public risk managers to discuss and hear reac-

tions to FEMA’s first draft of its insurance proposal relative to Public Assis-

tance grants under the Stafford Act (see 11/1988, 7/1995, 1/1997, 3/1998, and

11/1998). FEMA’s goal is to limit funding under the Act’s Public Assistance

program to the state and local agencies that maintain specified minimum levels

of insurance coverage. FEMA believes that existing rules create a disincentive

to both carry insurance and to manage the risk of disasters and are inequitable

in that they penalize state and local governments that purchase appropriate in-

surance coverage.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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1/1999

National Flood Insurance Program: Issues Assessment, A Report to the Fed-

eral Insurance Administration is published. This report, funded by FEMA, is

based on a literature review to answer questions about the program’s effective-

ness by assessing two central concerns: the relation between floodplain devel-

opment and insurance availability and enforcement of floodplain management

requirements at the local level. The report notes that “none of the studies of-

fered irrefutable evidence that the availability of flood insurance is a primary

factor in floodplain development today. Neither does the empirical evidence

lend itself to the opposite conclusion.” Noting that “it is there, in the day-to-

day decisions by location officials, that the [NFIP] either succeeds or fails to

accomplish its statutory mandate” and that “a number of tools and oversight

systems have been devised to monitor, support and evaluate the quality of

community enforcement.” The report offers no conclusions regarding the sec-

ond concern.

1/1999 FEMA requests that Congress authorize a transaction fee of $15 for each fed-

erally insured mortgage issued. The money collected will be used to fund

FEMA’s modernization of its maps. Congress eventually declines the request

but does provide $5 million to begin updating the maps.

The U.S. Senate Committee on Appropriations instructs FEMA to evaluate

alternative funding options. FEMA’s response is contained in Flood Map Mod-

ernization Plan: Funding Options Report. Four options are identified: a map-

use fee; an increase in the fee charged for each flood insurance policy; sup-

plemental appropriations; and use of the NFIP’s borrowing authority.

2/1999 The U.S. House of Representatives’ Committee on Financial Services indicates

that its oversight plan for the 106

Congress includes attention to repetitive

losses and the implementation of the Community Development and Regulatory

Improvement Act of 1994 (see 9/1994).

3/1999 To recognize the inherently greater flood risk of pre-FIRM, V-zone properties,

FIA announces increases in the amount of premiums that flood insurance poli-

cyholders must pay for flood insurance coverage for pre-FIRM buildings in

coastal areas subject to high velocity waters, such as storm surges and wind-

driven waves.

4/1999 FIA hires an advertising agency to plan, implement, and evaluate the five-year

“Cover America II” campaign. A new logo is developed for the campaign.

5/1999 On May 1, the NFIP eliminates the three-year policy.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

5/1999 At FEMA’s request, a Study of the Economic Effects of Charging Actuarially

Based Premium Rates for pre-FIRM Structures is completed. The study exam-

ines: the number and types of properties that would be affected by an increase

in premium rates; the number of policyholders that might cancel their policies

if rates are increased; and the effects of increased premiums on property taxes

and the value of land. The report estimates that there are about seven million

structures in a SFHA. The study concludes that an immediate elimination of

subsidized flood insurance would lead to a significant drop in the number of

people retaining insurance. In the report’s words, “…if [the] subsidy was

eliminated…average premiums for residential properties subject to substantial

flood risk would likely increase from $585 to about $2,000 annually.”

5/1999 The Association of State Floodplain Managers initiates a Certified Floodplain

Manager (CFM) Program. The program is intended to advance the knowledge

of floodplain managers, enhance the profession of floodplain management, and

provide a common basis for understanding floods and flood losses.

5/1999 A. U.S. District judge in the Central District of California rules that FEMA did

not violate the National Environmental Policy Act by requiring flood insurance

of property owners in five southern California cities without first preparing an

environmental impact statement (see 9/1998).

6/1999 The Board of Governors of the Federal Reserve System imposes the first pen-

alty on a federally regulated lending institution, in Puerto Rico, for a pattern of

noncompliance with the mandatory-purchase requirement of the Flood Disaster

Protection Act of 1973. The Federal Deposit Insurance Corporation subse-

quently imposes a fine on a lending institution for the same reason.

7/1999 FEMA submits a draft, revised regulation on Public Assistance grants and in-

surance requirements to the Office of Management and Budget for review and

approval (see 11/1988, 7/1995, 1/1997, 3/1998, 11/1998, and 1/1999). FEMA

designates the draft proposed rule as being economically significant under Ex-

ecutive Order 12866, Regulatory Planning and Review, but has not yet com-

pleted analyses of the economic impact the proposed regulations would have

on small entities.

7/1999 With the imminent expiration of the first Group Flood Insurance Policies (see

5/1996 and 8/1996), FEMA extends the coverage of such policies from 36 to

37 months. As of September 30, 2002, FEMA reinstates the 36-month term for

Group Flood Insurance Policies.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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8/1999 FEMA proposes to apply full-risk premium rates on new or renewed policies

for structures that have suffered multiple flood losses whose owners have de-

clined an offer of funding to elevate, relocate, or flood proof the structure. La-

beled as “target repetitive loss buildings,” these structures have had two or

more flood-related losses, each resulting in a claim of $1,000 or more, within

the past 10 years. In addition, such structures have suffered four or more in-

sured flood losses or two insured flood losses cumulatively greater than their

value.

FEMA indicates that approximately 8,000 insured structures have suffered

four or more losses; another 1,300 insured buildings have had two or three

losses that cumulatively exceed their value.

8/1999 The GAO releases Disaster Assistance: Opportunities to Improve Cost-

Effectiveness Determinations for Mitigation Grants. The 1988 Stafford Act

requires that such grants be cost effective, but the report notes that 15 percent

of funds distributed by FEMA’s Hazard Grant Mitigation Program have been

exempted from benefit-cost analysis or had a benefit-cost ratio of less than 1.0.

In addition, 39 percent of projects had a benefit-cost ratio of between 1.0 and

1.5, and were thus “marginally effective,” at least according to a subcommittee

of the U.S. House of Representatives’ Committee on Transportation and Infra-

structure.

FEMA states that it will comply with all of the recommendations included in

the GAO report.

8/1999 FEMA issues Cost Estimate for the Flood Map Modernization Plan. The re-

port estimates it will cost $750 million to implement the plan over the seven-

year period from FY 2001-07. The upgrade of the map inventory will involve

updating and producing digital maps for at least 17,500 panels requiring up-

dates, digital conversion and maintenance for 74,500 panels, and development

of flood data and digital flood maps for 13,700 panels for flood-prone commu-

nities without flood maps.

9/1999 In an Audit of the Effectiveness of the Substantial Damage Rule, FEMA’s In-

spector General notes that many communities participating in the NFIP fail to

enforce the substantial damage rule. As a result, subsidized rates are provided

to structures that should be rated on an actuarial basis.

9/1999 FEMA publishes an Economic Evaluation of Substantially Damaged Struc-

tures Funded through the Hazard Mitigation Grant Program. The report retro-

spectively calculates the costs and benefits of approximately 10 percent of ac-

quisition and relocation projects for substantially damaged structures in flood-

plains.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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9/1999 Hurricane Floyd strikes North Carolina and causes the worst flooding in the

state’s history. Over $100 million in disaster assistance is provided to more

than 72,000 residents.

Throughout the state, nearly 150,000 structures are located in SFHAs, but only

one-third are covered by flood insurance.

10/1999 FEMA’s director hosts a meeting with insurance executives. According to

FEMA, the participants agree that FEMA’s proposal on Public Assistance

grants has strong merit and the amount of insurance coverage appears reason-

able (see 11/1988, 7/1995, 1/1997, 3/1998, 11/1998, and 1/1999). FEMA also

observes that doubt is expressed about the market’s ability to provide earth-

quake coverage immediately and that several meeting participants suggested

separating earthquake insurance from the proposal.

10/1999 FIA begins operating the Special Direct Facility (SDF) to centralize policies

with repetitive losses for control purposes and mitigation actions. Two subsets

of currently insured repetitive-loss properties are moved to the SDF – those

with two or three paid losses where the cumulative payments for flood insur-

ance claims are equal to or greater than the building value and those with four

or more paid losses.

10/1999 FEMA director James Lee Witt informs a congressional committee that 84 per-

cent of the agency’s flood-hazard maps are more than five years old, 66 per-

cent are greater than 10 years old, and 33 percent are greater than 15 years old.

Some maps, produced in the 1970s, have never been updated.

10/1999 At a hearing before the U.S. House of Representatives’ Subcommittee on

Housing and Community Development Opportunity of the Committee on

Banking and Financial Services, Director Witt notes that FEMA has identified

approximately 10,000 properties that have had four or more flood losses or two

or three flood losses that cumulatively exceed the value of the building. The

NFIP has provided over $800 million in claims for these properties over the

past 21 years. The total cost for mitigation or buyout for these structures would

be about $450 million.

10/1999 Through October 1999, FEMA has issued 98 Group Flood Insurance Policies

(see 3/1995, 5/1996, 8/1996, and 7/1999) covering nearly 29,000 households.

11/1999 The H. John Heinz III Center for Science, Economics and the Environment

publishes The Hidden Costs of Coastal Hazards. The result of a two-year study

by an expert panel, the report suggests new strategies to identify and reduce

weather-related hazards and the costs associated with rapidly increasing

coastal development. The report offers the first in-depth estimates of the costs

of coastal hazards to natural resources, social institutions, business, and the

built environment.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

11/1999 “Cover America II” begins to increase awareness of the NFIP and flood insur-

ance.

11/1999 The Consolidated Appropriations Act (PL 106-113) directs FEMA to study the

feasibility and justification for reducing buyout assistance to property owners

who fail to purchase and maintain flood insurance. The Act also authorizes up

to $215 million for the buyout or relocation of owner-occupied principal resi-

dences located in a 100-year floodplain that were made uninhabitable by flood-

ing caused by Hurricane Floyd and “surrounding events” in October 1999. Be-

fore such funds can be allocated, FEMA will be required to establish proce-

dures for establishing priorities and for benefit-cost analyses.

12/1999 By the end of 1999, there are more than 4.2 million flood insurance policies in

effect, with total insurance coverage of more than $534 billion, an increase of

more than 250 percent since December 1990.

1999 Approximately 20 years after publication of the first Assessment of Research

on Natural Hazards, researchers complete a follow-up study to reassess the

state of knowledge of natural hazards in the United States. Begun in 1992, the

study involves more than 120 experts and culminates in Disasters by Design:

A Reassessment of the Natural Hazards in the United States. The report con-

cludes that: a) one of the central problems in coping with disasters is the belief

that technology can be used to control nature; b) most strategies for coping

with hazards fail to consider the complexity and changing nature of hazards;

and c) losses from hazards result from shortsighted and narrow concepts of the

relation of humans to the natural environment. To redress these shortcomings,

the researchers recommend that the United States shift to a policy of “sustain-

able hazard mitigation.” This concept links wise management of natural re-

sources with local economic and social resiliency.

1999 In Disasters and Democracy: The Politics of Extreme Natural Events, Ruther-

ford Platt and his colleagues trace the historical evolution of the federal role in

disaster assistance and analyze disaster declarations and federal assistance pro-

vided under the Robert T. Stafford Relief and Emergency Assistance Act since

1988.

End 1990s FEMA has mapped more than 100 million acres of SFHAs and had designated

about six million acres of floodways along 40,000 stream and river miles. The

total cost for these studies is approximately $1.3 billion.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1/2000 The International Building Code and the International Residential Code are

published. For the first time there is a national model building code that in-

cludes the construction provisions of the NFIP. The codes are substantially

equivalent to the requirements of the National Earthquake Hazard Reduction

Program Recommended Provisions (1977) and the state-of-the-art wind-load

provisions of the American Society of Civil Engineers (1998), Minimum De-

sign Loads for Buildings and Other Structures. The International Residential

Code represents the first time that wind, flood, and seismic loads are compre-

hensively addressed in a model for one- and two-family dwellings.

2/2000 In Disaster Assistance: Issues Related to the Development of FEMA’s Insur-

ance Requirements, the GAO concludes that FEMA had conscientiously

sought to obtain and incorporate comments from stakeholders on its proposal

to revise the Public Assistance program (see 11/1988, 7/1995, 1/1997, 3/1998,

11/1998, 1/1999, and 10/1999). In contrast, the GAO also finds that FEMA

had not completed the analysis required for economically significant regula-

tions.

2/2000 Seeking public comment and advice, FEMA publishes an Advance Notice of

Proposed Rulemaking, which indicates FEMA’s belief that its regulations cov-

ering Public Assistance insurance requirements are inadequate with respect to

public buildings (see 11/1988, 7/1995, 1/1997, 3/1998, 11/1998, 1/1999, and

10/1999). The notice identifies three options; FEMA favors the option that

would provide funds for the repair of public buildings, through federal disaster

assistance, only if they are insured at the time of the disaster. States and local

governments would have 36 months after the publication date of the final rule

to purchase the required insurance.

4/2000 The Association of State Floodplain Managers publishes The Nation’s Re-

sponse to Flood Disasters: A Historical Account, which summarizes the forces

and events that have affected floodplain management in the United States since

the 1850s.

5/2000 The NFIP revises its fee schedule for processing certain types of requests for

changes to NFIP maps and for processing requests for particular NFIP map and

insurance products. The changes in the fee schedules are intended to further

reduce the NFIP’s expenses by recovering more fully the costs associated with

processing conditional and final requests for map changes; retrieving, repro-

ducing, and distributing technical and administrative data related to analyses

and mapping; and producing, retrieving, and distributing map and

insurance

products.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

6/2000 In collaboration with the H. John Heinz III Center for Science, Economics and

the Environment, FEMA releases Evaluation of Erosion Hazards. The report

responds to a congressional mandate included in Section 577 of the National

Flood Insurance Reform Act of 1994. Noting that coastal erosion potentially

jeopardizes nearly 87,000 homes, the report recommends that Congress should

require FEMA to include the anticipated cost of erosion when setting flood

insurance rates. The NFIP is not permitted to take into account expected losses

from coastal erosion when establishing premiums for flood insurance.

6/2000 FEMA issues Call for Issues: Status Report, which summarizes the NFIP-

related comments and suggestions of more than 170 stakeholders (see 9/1998).

6/2000 The NFIP issues rules that establish procedures for inspections to help verify

that structures comply with a community’s floodplain ordinances and to ensure

that property owners pay flood insurance premiums commensurate with their

flood risks. The procedures, to be used initially in a pilot study in Monroe

County, Florida, will require owners of insured buildings to obtain an inspec-

tion from local floodplain officials as a condition of receiving insurance. Re-

sults of the pilot study will be evaluated before further implementation of the

new procedures.

6/2000 FEMA sponsors a Floodplain Management Forum in Washington, DC, which

gathers a group of experts on floodplain management together to discuss the

future of floodplain management in the United States.

7/2000 PL 106-246 provides $50 million for the buyout and elevation of structures in

states that received presidential disaster declarations in FY 1999 or 2000.

8/2000 At the request of the U.S. Senate’s Committee on Banking, Housing, and Ur-

ban Affairs, the GAO initiates a study of the compliance of federally regulated

lending institutions with the NFIP’s mandatory-purchase provisions (see

12/1973, 1/1974, 8/1990, and 6/1999). The Flood Disaster Protection Act of

1973 prohibits such institutions from making, increasing, extending, or renew-

ing any loan on a property without requiring flood insurance if that property is

located in a SFHA within a community participating in the NFIP. As a result

of the GAO study, FIA delays its own study on the subject.

8/2000 In response to the Consolidated Appropriations Act (PL 106-113) (see

11/1999), FEMA reports to Congress that there is no justification for reducing

buyout assistance to property owners who fail to purchase and maintain flood

insurance. In the report’s words, “Doing so will not result in any significant

increase in the purchase of flood insurance, but will have the unintended con-

sequence of effectively penalizing the low income populations most in need of

federal assistance to move out of harm’s way….”

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

8/2000 In Opportunities to Enhance Compliance with Homeowner Flood Insurance

Purchase Requirements, FEMA’s Inspector General examines compliance

with the requirement for mandatory purchase of flood insurance by property

owners with mortgages from federally regulated lending institutions. In its

sample of structures, the Inspector General finds that 10 percent did not have

flood insurance even though they met the requirements for mandatory pur-

chase. The examination also notes that there is “no process to ensure that struc-

tures remapped into SFHAs are covered by or will be required to purchase a

flood insurance policy.”

The report also observes that Group Flood Insurance Policies (see 3/1995 and

8/1996) appear to have lessened the costs of some disasters and appear to be

cost-effective. In contrast, once the federal and state subsidies end for such

policies, the low-income recipients of these subsidies rarely continue their cov-

erage, although they are required to do so under the terms of their receipt of

previously subsidized coverage.

9/2000 In an Audit of FEMA’s Cost Estimates for Implementing the Flood Map Mod-

ernization Plan, FEMA’s Inspector General concludes that the agency’s meth-

odology for estimating the plan’s costs are generally sound but that FEMA

“has not made significant progress in implementing the plan’s primary objec-

tives” due to a lack of funds and the accuracy of the estimated costs of imple-

mentation should be improved.

9/2000

FEMA initiates the first comprehensive evaluation of the NFIP. A consulting

firm is hired to design the evaluation and to assess the feasibility of evaluating

questions in six areas of inquiry.

10/2000 FIA issues final regulations in the Federal Register that render the standard

flood insurance policy in plain English and restructures its format to resemble

a homeowner’s policy. In addition, use of FEMA’s new elevation certificate

becomes mandatory.

10/2000 FEMA summarizes comments in the Federal Register from nearly 300 stake-

holders who expressed their opinions about the agency’s proposed revisions to

the Public Assistance program (see 11/1988, 7/1995, 1/1997, 3/1998, 11/1998,

1/1999, 10/1999, and 2/2000). Opponents claim that states and communities

cannot afford to insure public buildings and that coverage would be difficult to

obtain. FEMA notes that it will initiate a study on insurance coverage of pub-

licly owned buildings and facilities.

10/2000 FEMA issues its Biennial Report to Congress on the Community Rating Sys-

tem. As of October 1, 926 communities are participating in CRS. Tulsa, Okla-

homa continues to be the best rated community (see 10/1998), followed by

Juno Beach and Sanibel, Florida; Kemah, Texas; and Pierce and Thurston

Counties, Washington.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

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10/2000 The Disaster Mitigation and Cost Recovery Act (PL 106-390) amends the

1988 Stafford Act and provides authority to establish a program to provide

technical and financial assistance to states and local governments to assist in

the implementation of predisaster hazard-mitigation measures that are cost-

effective and that are designed to reduce injuries, loss of life, and damage and

destruction of property, including damage to critical services and facilities un-

der the jurisdiction of the states or local governments.

The law also requires states to prepare a comprehensive state program for

emergency and disaster mitigation prior to receiving funds from FEMA and

directs the GAO to conduct a study to determine the current and future ex-

pected availability of disaster insurance for public infrastructure eligible for

assistance under the Stafford Act.

The law further requires that FEMA discontinue its Individual and Family

Grant Program as of May 2002 and replace it with a new program entitled “Fi-

nancial Assistance to Address Other Needs” (see 2/1995).

11/2000 President William J. Clinton signs into law the Coastal Barrier Resources Re-

authorization Act of 2000 (PL 106-514), which reauthorizes and amends the

Coastal Barrier Resources Act (CBRA) (see 10/1982 and 11/1990). One provi-

sion of the Act allows for the voluntary addition of lands to the Coastal Barrier

Resources System (CBRS) and could increase the amount of coastal barriers

protected by CBRA. The Act also codifies a set of mapping criteria, which will

help the public understand the technical basis behind delineating parts of the

CBRS. Finally, the Act authorizes a pilot program to digitally map coastal ar-

eas and to improve the coordination of mapping efforts at the federal, state,

and local levels.

12/2000 More than 200 communities are participating in Project Impact, FEMA’s pre-

disaster mitigation program.

2000 FIA’s business process improvement initiative results in a “Blueprint for the

Future” for the NFIP. Developed with the NFIP’s strategic partners, this blue-

print will be the foundation for strategic and performance planning. When

completed, Phase II will focus on FIA’s information technology requirements

and capabilities. Strategies for information technology, which lead to optimum

future operations, will be developed and assessed.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1/2001 In Compliance with Public Assistance Program’s Insurance Purchase Re-

quirements, FEMA’s Inspector General notes that neither FEMA nor the states

consistently maintain sufficient information to support their decisions on ap-

plicants’ insurance status (see 11/1988, 7/1995, 1/1997, 3/1998, 11/1998,

1/1999, 10/1999, 2/2000, and 10/2000). As a condition of receiving public as-

sistance, recipients are required to protect insurable facilities by obtaining and

maintaining insurance for the hazard that caused the damage. If the applicant

does not maintain insurance, FEMA will not provide any assistance to that ap-

plicant in future disasters of the same type. In about one-third of cases exam-

ined, states, or communities did not maintain required insurance. In other in-

stances, although proof of insurance was provided, some applicants for federal

assistance purchased less insurance than required. FEMA generally agreed to

implement the recommendations associated with the audit’s findings.

1/2001 Several environmental groups, including the Forest Guardians of Santa Fe, file

suit in U.S. District Court in New Mexico alleging that the NFIP promotes in-

appropriate development in floodplains of the Rio Grande and San Juan Rivers

and adversely affects the habitats of several endangered species.

2/2001 President George W. Bush submits to Congress his budget for 2002. This

“Blueprint for New Beginnings” includes reforms to the National Flood Insur-

ance Program aimed at saving $12 million dollars. The budget seeks to elimi-

nate the availability of flood insurance coverage to several thousand “repetitive

loss” properties and phase out the subsidization of premium rates for vacation

homes, rental properties, and other nonprimary residences and businesses. The

proposed budget would also eliminate funding for Project Impact (see

10/1997) because it “has not been proven effective.”

2/2001 The U.S. House of Representatives’ Committee on Financial Services indicates

that its oversight plan for the 107

Congress includes attention to the imple-

mentation of the Community Development and Regulatory Improvement Act

of 1994 (see 9/1994) and recent FEMA reports that address reductions in sub-

sidies and repetitive losses (see also 2/1999).

2/2001 In Buyouts: Hurricane Floyd and Other Issues Related to FEMA’s Hazard

Mitigation Grant Program, FEMA’s Inspector General notes that ambiguity in

the legislation authorizing buyouts of properties damaged by Hurricane Floyd

“caused significant delays in the commencement of the buyout process, con-

tributed to much confusion and frustration over the funding requirement to

execute such projects, and may have caused potential inequities in the type of

structures targeted for buyout…” (see 11/1999 and 7/2000).

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

5/2001 The GAO provides testimony and submits a statement to the U.S. Senate’s

Committee on Appropriations, Subcommittee on Veterans, Housing, and Inde-

pendent Agencies, on Emerging Opportunities to Better Measure Certain Re-

sults of the National Flood Insurance Program. The GAO finds that FEMA’s

performance goals do not assess the degree to which residents in flood-prone

areas participate in the program. Noting that better data are needed on the

number of structures in flood-prone areas, the GAO concludes that “Capturing

data on the numbers of uninsured and insured structures in flood-prone areas

can provide FEMA with another indication of how effectively the program is

penetrating those areas most at risk of flooding, whether the financial conse-

quences of floods in these areas are increasing or decreasing, and where mar-

keting efforts can better be targeted.”

6/2001 FEMA combines FIA and the Mitigation Directorate to form the Federal In-

surance Administration and Mitigation Administration (FIMA).

6/2001 The NFIP eliminates its outstanding debt to the Department of the Treasury.

This debt, which the NFIP had accumulated to pay for flood claims since the

1970s, had reached as much as $922 million in February 1999.

7/2001 In testimony before the U.S. House of Representatives’ Committee on Finan-

cial Services, Subcommittee on Housing and Community Opportunity,

FIMA’s acting director notes that pre-FIRM, subsidized policies represent ap-

proximately 27 percent of all of its policies. Among all policies, approximately

15 percent of properties have accounted for 38 percent of all of the NFIP’s

losses.

8/2001 Robert F. Shea is appointed Acting Federal Insurance and Mitigation Adminis-

trator.

9/2001 The Office of Federal Housing Enterprise Oversight proposes (and subse-

quently adopts in December 2001) a regulation to codify the office’s authority

to oversee and enforce certain statutory requirements affecting the operations

of government-sponsored enterprises regarding the NFIP.

10/2001 More than 4.37 million policies are in force, with a total coverage of approxi-

mately $594/5 billion. These policies are distributed among 19,713 communi-

ties, including 19,071 in the regular program and 642 in the emergency pro-

gram (see 12/1969); 938 communities (with 66 percent of all policyholders)

participate in the Community Rating System (see 10/1990).

12/2001 FEMA proposes to increase the amount of premium that policyholders must

pay for flood insurance for pre-FIRM buildings in coastal areas subject to

high-velocity waters, such as storm surges and wind-driven waves. If finalized,

the increase will represent the fifth such increase in rates for such policyhold-

ers (see 3/1999). The purpose of the proposed increase is to reflect the insur-

ance associated with their greater exposure to flood losses.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

1/2002 In response to the Disaster Mitigation Act of 2000 (PL 106-390) (see 10/2000),

FEMA proposes the consolidation of two disaster-relief programs, “Temporary

Housing Assistance” and “Individual and Family Grant Program,” into a single

program called “Federal Assistance to Individuals and Households.” In addi-

tion, FEMA proposes the elimination of Group Flood Insurance Policies (see

3/1995, 5/1996, 7/1999, 10/1999, and 8/2000), thus indicating its desire to “re-

store the responsibility for the flood insurance purchase requirement back to

the individual or household receiving federal assistance.”

1/2002 FEMA notifies officials in Monroe County, Florida, that its unincorporated

areas may be placed on probationary status with the NFIP due to ongoing defi-

ciencies in the local floodplain management program (see 6/2000).

3/2002 The NFIP amends its regulations to require that areas of Monroe County, Flor-

ida, that incorporate on or after January 1, 1999, and become eligible for the

sale of flood insurance must participate in the inspection program as a condi-

tion of joining the NFIP (see 6/2000 and 1/2002).

3/2002 The NFIP initiates a three-year pilot project that will permit governmental risk-

sharing pools to sell flood insurance to public entities under the NFIP’s WYO

effort. The NFIP limits participants in this pilot effort to a maximum of six

such insurers that are able to provide flood insurance for their public buildings.

3/2002 Anthony Lowe is appointed Federal Insurance and Mitigation Administrator.

5/2002 FEMA’s Inspector General publishes Extent that Mitigation Funds are Used to

Address Repetitive Flood Loss and Other Related Issues. This report assesses

the extent to which funds from the Hazard Mitigation Grant Program and the

Flood Mitigation Assistance Program are used to acquire repetitive-loss prop-

erties. The report concludes that such funds could be used more effectively,

especially with regard to the targeting of the most egregious repetitive-loss

properties (see 11/1988, 9/1994, 9/1996, 9/1999, and 2/2001).

6/2002 The GAO completes Extent of Noncompliance with Purchase Requirements is

Unknown. This report notes that flood insurance is required for properties lo-

cated in flood-prone areas of participating communities for the life of mort-

gage loans made or held by federally regulated lending institutions or guaran-

teed by federal agencies. Mortgages purchased by Government Sponsored En-

terprises (GSEs) are also included in this requirement as a result of the Na-

tional Flood Insurance Reform Act of 1994 (see 9/1994). Despite the require-

ment, the GAO notes that no definitive analysis has been conducted that meas-

ures the extent to which property owners who are required to purchase insur-

ance actually do so.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

6/2002

continued

On the basis of examinations and compliance reviews, bank regulators and

GSE officials believe that rates of noncompliance are low. In contrast, FEMA

officials disagree with bank regulators and these officials, contending that rates

of noncompliance are still significant. According to the GAO, these contrast-

ing views are due to the fact that the regulators and FEMA use different meas-

ures to assess compliance. Nonetheless, the GAO concludes that analysis of

the available data suggests that noncompliance could be low at loan origina-

tion.

6/2002 In Duplication of Benefits: National Flood Insurance Program and the Disas-

ter Housing Program’s Minimal Repair Grants, FEMA’s Inspector General

concludes that FEMA’s internal controls are inadequate to detect and prevent

duplication of benefits, which occurs when victims of floods receive benefits

or assistance from more than one source for the same damaged property.

6/2002 The Task Force on The Natural and Beneficial Functions of the Floodplain,

created by the National Flood Insurance Reform Act of 1994, concludes that

the benefits provided by natural floodplains in flood loss reduction have been

overlooked and that the protection and restoration of floodplains must be fur-

ther integrated into government programs.

9/2002 With the issuance of an interim final rule in the Federal Register, FEMA con-

solidates the Temporary Housing Assistance and Individual and Family Grant

Programs into a single program called Federal Assistance to Individuals and

Households (IHP) (see 1/2002). FEMA indicates that states will have the op-

tion to be active partners in the administration of this new program, which pro-

vides a maximum of $25,000. Recipients of assistance from the IHP will be

required to maintain flood insurance at least in the amount of the assistance, if

they own the affected structure, for as long as the structure exists. The flood

insurance requirement is reassigned to all subsequent owners of the flood-

damaged address.

9/2002 In conjunction with the creation of the IHP (see previous entry), FEMA re-

verses its earlier proposal to eliminate Group Flood Insurance Policies (see

1/2002). FEMA increases the coverage to $25,000 from $14,800, reduces the

term from 37 to 36 months, and retains a $200 deductible. The cost of the

three-year policy increases to $600 from $200. The cost-sharing arrangements

remain unchanged, with the states responsible for 25 percent of the cost and

the federal government for 75 percent (funded as part of the IHP grant).

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

9/2002 In Invalid Preferred Risk Policies Based on Loss History, FEMA’s Inspector

General reviews policies with a repetitive loss history in Florida, Louisiana,

Mississippi, Missouri, North Carolina, and Texas to determine which received

a preferred risk rating. The audit finds that FEMA failed to invalidate 76 per-

cent of the preferred risk policies (PRPs) included in the sample. To correct

such problems, the Inspector General recommends FIMA review monitoring

procedures to ensure WYO companies resolve rating errors in a timely manner.

10/2002 The NFIP pays the final $10 million installment on the $650 million it bor-

rowed to pay claims arising from Tropical Storm Allison. The storm resulted

in over 30,000 claims and approximately one billion dollars in claim payments.

10/2002 In Community Rating System: Effectiveness and Other Issues, FEMA’s Inspec-

tor General determines the effectiveness of CRS as a tool to improve local

policies and practices related to floodplain management. Overall, the report

finds that CRS is a disciplined and well-defined program in terms of its guide-

lines, requirements, and rating processes and procedures. However, FIMA

could enhance the effectiveness of CRS by: (1) performing Community Assis-

tance Visits in all CRS communities, (2) marketing CRS to communities hav-

ing greater exposure to the NFIP, (3) providing credit for increasing flood in-

surance coverage in a community, and (4) providing CRS coordinators with

access to claims data.

2/2003 FEMA’s Inspector General addresses the work done by three Flood Map Pro-

duction Coordination Contractors (mapping contractors) in Audit of FEMA’s

Use and Management of Flood Mapping Contractors. The audit reveals that

FEMA’s management of mapping contracts needs strengthening especially in

administration and support. According to the Inspector General, FEMA may

have the ability to update more maps if it (1) reduces spending on processing

Letters of Map Change, which accounted for 32 percent of contract spending

over fiscal years 2000 and 2001, and (2) revises contracting strategies to in-

crease competition and give contractors incentives to control costs.

3/2003 FEMA becomes part of the U.S. Department of Homeland Security and the

Emergency Preparedness and Response Directorate.

5/2003 FEMA increases the maximum claim payout for Increased Cost of Compliance

(ICC) coverage from $20,000 to $30,000 (see 6/1997).

8/2003 The NFIP has cash reserves of $580 million, which are available to pay future

claims.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

9/2003 FEMA recognizes Tulsa, Oklahoma, for outstanding achievements in reducing

flood risks with a rating of Class 2 in CRS. Beginning in October 2003, prop-

erty owners in the city will receive a 40 percent discount on their flood insur-

ance premiums. Tulsa represents the first community in the nation to achieve a

rating of Class 2.

9/2003 Hurricane Isabel, the only hurricane of the 2003 hurricane season to reach

Category 5 status, makes landfall in North Carolina. Isabel results in extensive

flooding in Baltimore and in other mid-Atlantic communities.

10/2003 FEMA offers states funds to upgrade their Map Modernization Implementation

Plans (MMIP), developed in 2002, and develop the Flood Map Modernization

State Business Plan. Using the Fiscal Year 2002 state plans as a starting point,

states are asked to identify the projects to be completed each year, the role

they play in managing the projects, and the support needed from FEMA.

FEMA's Cooperating Technical Partner (CTP) initiative continues to be the

funding mechanism for flood hazard mapping projects. A separate, distinct

funding mechanism provides for the management activities identified in this

plan.

03/2004 FEMA hosts the Mid-Atlantic Flood Insurance Summit to address concerns of

Hurricane Isabel victims in settling flood insurance claims. Insurance compa-

nies, agents and adjustors, policyholders, insurance commissioners and Con-

gressional staff meet in Falls Church , VA, to discuss solutions. As a result of

the summit, FEMA begins to offer Isabel victims three ways to request flood

insurance settlement review: by attending NFIP community outreach team

visits, by using a toll-free number to initiate flood insurance settlement review,

or by sending settlement review request form by mail. In April and May, com-

munity outreach teams visit hard-hit North Carolina, Virginia and Maryland

communities to offer policyholders face-to-face discussions with claims spe-

cialists.

3/2004 The General Accounting Office (GAO) releases Actions to Address Repetitive

Loss Properties on recent federal actions to target and reduce the number of

repetitive loss properties, defined as properties for which policyholders have

made two or more claims of $1,000 or more. About 1 percent of the 4.4 mil-

lion properties currently insured by the program fit this definition. About 38

percent of all program claim costs have been the result of repetitive loss prop-

erties, at a cost of about $4.6 billion since 1978. The report concludes that

FEMA’s strategy of targeting repetitive loss properties for mitigation and con-

gressional proposals to raise premiums have the potential to reduce the number

and vulnerability of repetitive loss properties.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

3/2004 The General Accounting Office (GAO) releases the report Flood Map Mod-

ernization: Program Strategy Shows Promise, But Challenges Remain. The

report finds several deficiencies in FEMA’s plan to implement updated maps

of flood zones. In developing digital flood maps, FEMA plans to incorporate

data that are of a level of specificity and accuracy commensurate with commu-

nities’ relative flood risk. FEMA has not yet established data standards that

describe the appropriate level of detail, accuracy, and analysis required to de-

velop digital maps based on risk level. Without such standards, FEMA cannot

ensure that it uses the same level of data collection and analysis for all com-

munities in the same risk category. FEMA has developed partnerships with

states and local entities that have begun mapping activities and has a strategy

on how to best work with these entities. However, the overall effectiveness of

FEMA’s future partnering efforts is uncertain because FEMA has not yet de-

veloped a clear strategy for partnering with communities with few resources

and little or no experience in flood mapping. GAO recommends that FEMA

should address differences among the communities for which flood maps are

being developed.

3/2004 FEMA revises the Disaster Mitigation Act planning guidance and checklists

for state and local hazard mitigation plans. Previously called the Interim Cri-

teria for Mitigation (issued in July 2002), the guidance and checklists are been

finalized as the Multi-Hazard Mitigation Planning Guidance. The new guid-

ance includes references to specific language in the rule, descriptions of the

relevant requirements, and sample plan text to illustrate distinctions between

plan approaches that would and would not meet Disaster Mitigation Act 2000

requirements. In addition, this document provides references to planning tools

that FEMA has made available to assist states, tribes, and localities in develop-

ing a comprehensive, multi-hazard approach to mitigation planning, and in

preparing plans that will meet the DMA 2000 requirements.

4/2004 FEMA updates Increased Cost of Compliance—Guidance for State and Local

Officials, a manual that helps officials understand the Increased Cost of Com-

pliance (ICC) coverage provisions. The manual covers how the owners of

buildings insured under the NFIP can benefit from ICC coverage, and how the

coverage relates to community administration of the local floodplain manage-

ment regulations and ordinances. The guidance highlights the new, increased

maximum benefit level of $30,000 available to eligible policyholders (see

5/2003 and 6/1997).

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

5/2004 Connecticut’s Governor Rowland signs into law House Bill 5045, An Act Con-

cerning Floodplain Management and Hazard Mitigation, based in part on No

Adverse Impact legislation. The new legislation requires municipalities to re-

vise their current floodplain zoning regulations or ordinances to include new

standards for compensatory storage and equal conveyance of floodwater. The

Connecticut Department of Environmental Protection will develop model

regulation language. The legislation requires the state to incorporate a natural

hazards element into the next revision of its plan of conservation and devel-

opment and enables municipalities to use local capital improvement funds

from the state to conduct floodplain management and hazard mitigation activi-

ties.

6/2004 David Maurstad is appointed Acting Director of the Mitigation Division and

Federal Insurance Administrator, replacing Anthony Lowe. His areas of over-

sight include the NFIP, the National Earthquake Hazards Reduction Program,

the National Dam Safety Program and the National Hurricane Program. Mr.

Maurstad previously served as Regional Director of FEMA’s Region VIII

since October 2001.

6/2004 President George W. Bush signs into law the Bunning-Bereuter-Blumenauer

Flood Insurance Reform Act of 2004 (H.R. 253). The Act includes reforms to

address repetitive loss properties and a reauthorization of the NFIP until Sep-

tember 30, 2008. Additional funding mechanisms focus mitigation efforts on

“severe” repetitive loss structures that result in a disproportionate amount of

claims to the National Flood Insurance Fund. The goals of the Act are to help

people who have experienced serious and repetitive flood damage to solve

their problems with financial assistance from the NFIP, communities, and

states; to end the abuses by those who misuse the program; and to improve

consumer understanding and rights of NFIP policyholders.

7/2004 FEMA issues an interim final rule in the Federal Register to amend the Fed-

eral

Insurance Administration, Financial Assistance/Subsidy Arrangement and

related regulations regarding issues of federal jurisdiction and applicability of

federal law for lawsuits involving Write-Your-Own (WYO) Companies and of

reimbursement to WYO Companies for the cost of litigation. Additionally,

FEMA amends procedures for companies seeking to become, and ceasing to

be, WYO Companies.

8/2004 to

9/2004

Florida experiences Tropical Storm Bonnie and Hurricanes Charley, Frances,

Ivan and Jeanne. Hurricane and tropical storm related disasters are also de-

clared in Alabama, Delaware, Georgia, Louisiana, Mississippi, New Jersey,

New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee,

Virginia and West Virginia.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

12/2004 NFIP paid losses for 2004 number 52,785, about 45 percent more than the

number of 2003 paid losses. FEMA pays out $1.9 billion in claims for 2004,

or about 2 ½ times the amount paid out in 2003. FEMA uses $225 million in

NFIP borrowing authority to pay 2004 flood loss claims.

4/2005 The President signs H.R. 1134, a measure to overturn a 2004 IRS ruling that

made disaster mitigation funds taxable as income.

4/2005 In testimony before the Subcommittee on Housing and Community Opportu-

nity, Committee on Financial Services, US House of Representatives, GAO

reports that many private company insurance agents, who are the main points

of NFIP contact for policyholders, have varying levels of NFIP knowledge.

GAO also reports that FEMA has not met the six-month timeframe given for

complying with the mandates of the Flood Insurance Reform Act of 2004,

which require FEMA to establish agent training standards, but that FEMA has

drafted the policyholder informational materials required by the Act.

7/2005 The Subcommittee on Housing and Community Opportunity, Committee on

Financial Services, US House of Representatives, holds hearing on a GAO re-

port, titled Flood Map Modernization: FEMA’s Implementation of a National

Strategy. GAO reports it found that the flood map modernization program

lacked performance measures that would measure adequately the effectiveness

of the map modernization program in meeting FEMA’s goals. GAO notes,

however, that FEMA had set target percentages in its Multi-Year Flood Haz-

ard Identification Plan in response to the recommendations.

7/2005 Dennis becomes the first major hurricane to strike the US in the 2005 hurri-

cane season. It reaches Category 4 status earlier in the hurricane season than

any Atlantic storm since 1957. It strikes the Florida Panhandle in the same

area affected by Hurricane Ivan the previous year, causing an approximate $4

to $6 billion in damage.

9/2005

Complying with Section 207 of the Flood Insurance Reform Act of 2004,

FEMA issues a notice in the Federal Register that establishes minimum train-

ing and education requirements for all insurance agents who sell Standard

Flood Insurance Policies issued through the NFIP.

8-9/2005 Hurricane Katrina strikes Louisiana and Mississippi, resulting in flood wall

and levee failures that cause up to 80 percent of the city of New Orleans to

flood, leaving homes in some city neighborhoods with flood water levels up to

the eaves for several weeks. Hurricane Rita strikes the Gulf Coast along the

western Louisiana and eastern Texas shores, and New Orleans experiences

new levee breaches and additional flooding.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

9/2005 Michael Brown, FEMA director since 2003, offers his resignation. R. David

Paulison, the director of FEMA's preparedness division, becomes interim

FEMA director.

9/2005

After Hurricane Katrina, R. David Paulison, Acting Under Secretary of Home-

land Security for Emergency Preparedness and Response, announces FEMA

will modify the NFIP claim settlement process to expedite the response to pol-

icy-holders in storm-stricken areas.

9/2005 In response to Hurricanes Katrina and Rita, the President signs H.R. 3669,

“The National Flood Insurance Enhanced Borrowing Authority Act of 2005”

to increase the NFIP’s borrowing authority from $1.5 billion to $3.5 billion.

The CBO estimates that FEMA probably will not be able to repay the funds

borrowed under H.R. 3669 within the “next 10 years” and that Katrina-related

claims will “exceed the total resources that will be available to FEMA under

H.R. 3669” and that “repayments of borrowed funds would not occur until af-

ter 2015.”

10/2005 FEMA publishes a “Summary of Coverage” and a “Claims Handbook” for

flood insurance policyholders, as required by the Flood Insurance Reform Act

of 2004. The handbook is made available on the Internet. WYO companies

and the NFIP Direct program begin distributing materials to policyholders as

required by the 2004 Act.

10/2005 GAO testifies before the Subcommittee on Housing and Community Opportu-

nity, Committee on Financial Services, US House of Representatives on Over-

sight and Management of the National Flood Insurance Program. GAO re-

ports that FEMA has not yet fully implemented some of the provisions of the

Flood Insurance Reform Act of 2004.

10/2005 David Maurstad, Acting Director of the FEMA Mitigation Division and Fed-

eral Insurance Administrator, testifies before the US Senate Committee on

Banking, Housing and Urban Affairs on “The Future of the National Flood

Insurance Program.” Mr. Maurstad reports to the Committee that magnitude

and severity of flood losses caused by Hurricanes Katrina and Rita are “un-

precedented in the history of the NFIP.” He states that Katrina and Rita-

related flood claims would “result in flood insurance claims that significantly

exceed the highest number of claims filed from any single event in the NFIP’s

history, and well more than triple the total number of claims filed in 2004.”

He states that Katrina and Rita-related NFIP claims could exceed $22 billion

and that the NFIP in its entire history has paid out only $15 billion total.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

10/2005

The National Science Foundation, the American Society of Civil Engineers,

and the state of Louisiana begin to investigate the New Orleans floodwall

breaches that led to massive flooding of the city after Hurricane Katrina. De-

fense Secretary Donald Rumsfeld announces that the National Academies of

Science and Engineering will begin a separate probe into the New Orleans

floodwall and levee failures.

10/2005 Eight tropical storm systems have struck southeastern US coasts during the

2005 season: Arlene, Cindy, Dennis, Katrina, Ophelia, Rita, Tammy and

Wilma. Four of the eight—Dennis (July), Katrina (August), Rita (September)

and Wilma (October)—are very destructive storms, and one—Katrina—

becomes perhaps the most costly natural disaster in US history. The 2005 hur-

ricane season becomes the most active on record, surpassing all previous hur-

ricane seasons in number of named storms.

10/2005 The Subcommittee on Water Resources and Environment, Committee on

Transportation and Infrastructure, US House of Representatives, holds two

hearings inquiring into the causes of the New Orleans levee failures, and about

ways in which New Orleans and other US cities at risk can be protected.

11/2005 The 2005 Atlantic hurricane season officially ends with a record 29 storms.

Twenty-six were named storms, including 5 storms relying on Greek letters for

their names. NOTE: on 12/30/05, the 2005 season continued with a 27

named storm, Zeta.

11/2005 President Bush signs legislation authorizing the NFIP to borrow up to an addi-

tional $18.5 billion to settle flood insurance claims for the 2005 claims year.

David Maurstad states that further borrowing authority will be needed. Long-

term NFIP reforms are also being considered along with the increases in bor-

rowing authority.

11/2005 FEMA begins to release “advisory BFEs” and recovery maps that reflect post-

hurricane data on flood risks for Katrina-affected Gulf Coast areas, so rebuild-

ing can proceed based upon current understandings of base flood elevations.

Localities are encouraged to adopt the advisory BFEs into their local ordi-

nances. FEMA plans to issued revised FIRMs in the next year or two that are

expected to closely resemble today’s advisory BFE maps.

11/2005 The causes of the New Orleans flooding and levee breaches are explored in a

hearing before the full US Senate Committee on Environment and Public

Works. The US Army Corps of Engineers and members of engineering teams

that are investigating the levee failures testify.

Chronology of The National Flood Insurance Program Evaluation of the NFIP

Date

11/2005 Proposals for flood insurance reform are considered by the US House Finan-

cial services Committee in H.R. 4320. A number of changes to the NFIP are

being considered, including increasing flood insurance coverage caps on struc-

tures and contents, and increasing fines imposed on lenders who fail to enforce

mandatory flood insurance purchase requirements.

12/2005 Although it officially ended on November 30, the 2005 hurricane season con-

tinues with another named tropical system, Zeta. Zeta brings the total number

of 2005 tropical systems to 30, including 27 named storms.

01/2006 With Zeta still active, the Atlantic hurricane season extends into January for

only the second time since records have been kept.

Chronology of The National Flood Insurance Program Evaluation of the NFIP