42 U.S.C. § 4015 : US Code - Section 4015: Chargeable premium rates

Search 42 U.S.C. § 4015 : US Code - Section 4015: Chargeable premium rates

(a) Establishment; terms and conditions
On the basis of estimates made under section 4014 of this title,
and such other information as may be necessary, the Director shall
from time to time, after consultation with the advisory committee
authorized under section 4025 of this title, appropriate
representatives of the pool formed or otherwise created under
section 4051 of this title, and appropriate representatives of the
insurance authorities of the respective States, prescribe by
regulation -
(1) chargeable premium rates for any types and classes of
properties for which insurance coverage shall be available under
section 4012 of this title (at less than the estimated risk
premium rates under section 4014(a)(1) of this title, where
necessary), and
(2) the terms and conditions under which, and the areas
(including subdivisions thereof) within which, such rates shall
apply.
(b) Considerations for rates
Such rates shall, insofar as practicable, be -
(1) based on a consideration of the respective risks involved,
including differences in risks due to land use measures, flood-
proofing, flood forecasting, and similar measures.
(2) adequate, on the basis of accepted actuarial principles, to
provide reserves for anticipated losses, or, if less than such
amount, consistent with the objective of making flood insurance
available where necessary at reasonable rates so as to encourage
prospective insureds to purchase such insurance and with the
purposes of this chapter,
(3) adequate, together with the fee under paragraph (1)(B)(iii)
or (2) of section 4014(a) of this title, to provide for any
administrative expenses of the flood insurance and floodplain
management programs (including the costs of mapping activities
under section 4101 of this title), and
(4) stated so as to reflect the basis for such rates, including
the differences (if any) between the estimated risk premium rates
under section 4014(a)(1) of this title and the estimated rates
under section 4014(a)(2) of this title.
(c) Actuarial rate properties
Subject only to the limitations provided under paragraphs (1) and
(2), the chargeable rate shall not be less than the applicable
estimated risk premium rate for such area (or subdivision thereof)
under section 4014(a)(1) of this title with respect to the
following properties:
(1) Post-firm properties
Any property the construction or substantial improvement of
which the Director determines has been started after December 31,
1974, or started after the effective date of the initial rate map
published by the Director under paragraph (2) of section 4101 of
this title for the area in which such property is located,
whichever is later, except that the chargeable rate for
properties under this paragraph shall be subject to the
limitation under subsection (e) of this section.
(2) Certain leased coastal and river properties
Any property leased from the Federal Government (including
residential and nonresidential properties) that the Director
determines is located on the river-facing side of any dike,
levee, or other riverine flood control structure, or seaward of
any seawall or other coastal flood control structure.
(d) Payment of certain sums to Director; deposits in Fund
With respect to any chargeable premium rate prescribed under this
section, a sum equal to the portion of the rate that covers any
administrative expenses of carrying out the flood insurance and
floodplain management programs which have been estimated under
paragraphs (1)(B)(ii) and (1)(B)(iii) of section 4014(a) of this
title or paragraph (2) of such section (including the fees under
such paragraphs), shall be paid to the Director. The Director shall
deposit the sum in the National Flood Insurance Fund established
under section 4017 of this title.
(e) Annual limitation on premium increases
Except with respect to properties described under paragraph (2)
or (3) (!1) of subsection (c) of this section, and notwithstanding
any other provision of this chapter, the chargeable risk premium
rates for flood insurance under this chapter for any properties
within any single risk classification may not be increased by an
amount that would result in the average of such rate increases for
properties within the risk classification during any 12-month
period exceeding 10 percent of the average of the risk premium
rates for properties within the risk classification upon the
commencement of such 12-month period.
(f) Adjustment of premium
Notwithstanding any other provision of law, if the Director
determines that the holder of a flood insurance policy issued under
this chapter is paying a lower premium than is required under this
section due to an error in the flood plain determination, the
Director may only prospectively charge the higher premium rate.