Analysis of the Flood Insurance Reauthorization and Reform Law (2012)

The Georgetown Climate Center's Jessica Grannis released a summary and analysis of Biggert-Waters Flood Insurance Reform Act of 2012, which includes several reforms that could assist state and local governments looking to implement policies to adapt to sea-level rise and other flood impacts from climate changes.

The Act was signed into law and passed by the Congress as part of the Moving Ahead for Progress in the 21st Century Act (H.R. 4348) on June 29, 2012.

Key provisions of the legislation:

  • Establish a Technical Mapping Advisory Council (TMAC) to provide recommendations to FEMA about how to consider the impacts of sea-level rise in flood insurance rate maps (FIRMs), among other things.
  • Allow FEMA to update FIRMs to include “relevant information and data” on flood hazards caused by land-use changes, and “future changes in sea levels, precipitation, and intensity of hurricanes,” among other things, and remove limitations on state and local financial contributions for updating FIRMs (previously capped at 50 percent).
  • Allow insurance premium rates increases of 20 percent annually (previously capped at 10 percent), allow for deductibles, and require that premiums be calculated based upon “average historical loss year,” including catastrophic loss years.
  • Increase the amount of flood insurance for multi-family properties of 5 or more residences (previously limited to properties of 4 or less residences).
  • Phase out subsidies for severe repetitive loss properties, second homes, business properties, homes substantially damaged or improved (i.e., greater than a percentage of the market value of the home), and homes sold to new owners.
  • Require the creation of a Reserve Fund.
  • Require the development of a plan for repaying debt owed to the U.S. Treasury (FEMA had to borrow approximately $21 billion as a result of claims after hurricanes in 2005).
  • Amend the Mitigation Grant Assistance Program to allow FEMA to pay for 100 percent of eligible costs to fund the acquisition or relocation of severe repetitive loss structures, even where they do not meet cost-effectiveness requirements.
  • Extend flood insurance coverage at lower rates to communities that “have made adequate progress” in reconstructing or building a flood control structure that will protect the community from a 100-year flood.
  • Allow for private insurance, consistent with NFIP policies, to satisfy insurance requirements needed to obtain federally-backed mortgages.
  • Require several studies for additional reforms and improvements to the NFIP—
    • establishment of a Flood Protection Structure Accreditation Task Force to make recommendations on how to accredit the safety of flood control structures;
    • study on improving interagency and intergovernmental coordination on flood mapping and financing options for updating flood maps;
    • study of the solvency of the NFIP;
    • study of pre-FIRM structures (defined below) and options for eliminating subsidies to these structures;
    • study on risks to residual risk areas and best practices for managing flood risks in these areas; and
    • study on using reinsurance to manage financial risks associated with flooding and options for privatizing the NFIP.



Publication Date: August 14, 2012

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  • Legal Analysis
  • Policy analysis/recommendations


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