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United States Code (Last Updated: May 24, 2014) |
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Title 42. THE PUBLIC HEALTH AND WELFARE |
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Chapter 50. NATIONAL FLOOD INSURANCE |
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SubChapter II. ORGANIZATION AND ADMINISTRATION OF FLOOD INSURANCE PROGRAM |
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Part A. Industry Program With Federal Financial Assistance |
§ 4057. Alternative loss allocation system for indeterminate claims
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(a) Definitions In this section: (1) Administrator The term “Administrator” means the Administrator of the Federal Emergency Management Agency.
(2) COASTAL Formula The term “COASTAL Formula” means the formula established under subsection (b).
(3) Coastal State The term “coastal State” has the meaning given the term “coastal state” in section 1453 of title 16.
(4) Indeterminate loss (A) In general The term “indeterminate loss” means, as determined by an insurance claims adjuster certified under the national flood insurance program and in consultation with an engineer as appropriate, a loss resulting from physical damage to, or loss of, property located in any coastal State arising from the combined perils of flood and wind associated with a named storm.
(B) Requirements An insurance claims adjuster certified under the national flood insurance program shall only determine that a loss is an indeterminate loss if the claims adjuster determines that— (i) no material remnant of physical buildings or man-made structures remain except building foundations for the specific property for which the claim is made; and (ii) there is insufficient or no tangible evidence created, yielded, or otherwise left behind of the specific property for which the claim is made as a result of the named storm. (5) Named storm The term “named storm” means any organized weather system with a defined surface circulation and maximum winds of not less than 39 miles per hour which the National Hurricane Center of the United States National Weather Service names as a tropical storm or a hurricane.
(6) Post-storm assessment The term “post-storm assessment” means the post-storm assessment developed under section 3611(b) of title 33.
(7) State The term “State” means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any other territory or possession of the United States.
(8) Secretary The term “Secretary” means the Secretary of Homeland Security.
(9) Standard insurance policy The term “standard insurance policy” means any insurance policy issued under the national flood insurance program that covers loss or damage to property resulting from water peril.
(10) Property The term “property” means real or personal property that is insured under a standard insurance policy for loss or damage to structure or contents.
(11) Under Secretary The term “Under Secretary” means the Under Secretary of Commerce for Oceans and Atmosphere, in the Under Secretary’s capacity as Administrator of the National Oceanic and Atmospheric Administration.
(b) Establishment of flood loss allocation formula for indeterminate claims (1) In general Not later than 180 days after the date on which the protocol is established under section 3611(c)(1) of title 33, the Secretary, acting through the Administrator and in consultation with the Under Secretary, shall establish by rule a standard formula to determine and allocate wind losses and flood losses for claims involving indeterminate losses.
(2) Contents The standard formula established under paragraph (1) shall— (A) incorporate data available from the Coastal Wind and Water Event Database established under section 3611(f) of title 33; (B) use relevant data provided on the National Flood Insurance Program Elevation Certificate for each indeterminate loss for which the formula is used; (C) consider any sufficient and credible evidence, approved by the Administrator, of the pre-event condition of a specific property, including the findings of any policyholder or insurance claims adjuster in connection with the indeterminate loss to that specific property; (D) include other measures, as the Administrator considers appropriate, required to determine and allocate by mathematical formula the property damage caused by flood or storm surge associated with a named storm; and (E) subject to paragraph (3), for each indeterminate loss, use the post-storm assessment to allocate water damage (flood or storm surge) associated with a named storm. (3) Degree of accuracy required The standard formula established under paragraph (1) shall specify that the Administrator may only use the post-storm assessment for purposes of the formula if the Under Secretary certifies that the post-storm assessment has a degree of accuracy of not less than 90 percent in connection with the specific indeterminate loss for which the assessment and formula are used.
(c) Authorized use of post-storm assessment and COASTAL Formula (1) In general Subject to paragraph (3), the Administrator may use the post-storm assessment and the COASTAL Formula to— (A) review flood loss payments for indeterminate losses, including as part of the quality assurance reinspection program of the Federal Emergency Management Agency for claims under the national flood insurance program and any other process approved by the Administrator to review and validate payments under the national flood insurance program for indeterminate losses following a named storm; and (B) assist the national flood insurance program to— (i) properly cover qualified flood loss for claims for indeterminate losses; and (ii) avoid paying for any loss or damage to property caused by any peril (including wind), other than flood or storm surge, that is not covered under a standard policy under the national flood insurance program. (2) Federal disaster declaration Subject to paragraph (3), in order to expedite claims and reduce costs to the national flood insurance program, following any major disaster declared by the President under section 5170 of this title relating to a named storm in a coastal State, the Administrator may use the COASTAL Formula to determine and pay for any flood loss covered under a standard insurance policy under the national flood insurance program, if the loss is an indeterminate loss.
(3) National Academy of Sciences evaluation (A) Evaluation required (i) Evaluation Upon the issuance of the rule establishing the COASTAL Formula, and each time the Administrator modifies the COASTAL Formula, the National Academy of Sciences shall— (I) evaluate the expected financial impact on the national flood insurance program of the use of the COASTAL Formula as so established or modified; and (II) evaluate the validity of the scientific assumptions upon which the formula is based and determine whether the COASTAL formula shall be construed to require the Administrator to make any payment under the national flood insurance program, or an insurance company to make any payment, for an indeterminate loss based upon post-storm assessment or the COASTAL Formula. (i) Applicability Subsection (c) shall apply with respect to an indeterminate loss associated with a named storm that occurs after the date on which the Administrator issues the rule establishing the COASTAL Formula under subsection (b).
(j) Rule of Construction Nothing in this subsection 3 shall be construed to negate, set aside, or void any policy limit, including any loss limitation, set forth in a standard insurance policy.