Rule2021-25956
National Flood Insurance Program: Removal of Best's Financial Size Category From Write-Your-Own Participation Criteria
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 29, 2021
Effective
November 29, 2021
Issuing agencies
Homeland Security DepartmentFederal Emergency Management Agency
Abstract
The Federal Emergency Management Agency (FEMA) is revising its regulations to remove a requirement that a private insurance company applying to participate in the Write-Your-Own program furnish its Best's Financial Size Category for the purpose of setting marketing goals.
Full Text
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<title>Federal Register, Volume 86 Issue 226 (Monday, November 29, 2021)</title>
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[Federal Register Volume 86, Number 226 (Monday, November 29, 2021)]
[Rules and Regulations]
[Pages 67654-67659]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-25956]
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DEPARTMENT OF HOMELAND SECURITY
Federal Emergency Management Agency
44 CFR Part 62
[Docket ID FEMA-2021-0030]
RIN 1660-AB13
National Flood Insurance Program: Removal of Best's Financial
Size Category From Write-Your-Own Participation Criteria
AGENCY: Federal Emergency Management Agency, Department of Homeland
Security (DHS).
ACTION: Final rule.
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SUMMARY: The Federal Emergency Management Agency (FEMA) is revising its
regulations to remove a requirement that a private insurance company
applying to participate in the Write-Your-Own program furnish its
Best's Financial Size Category for the purpose of setting marketing
goals.
DATES: This rule is effective November 29, 2021.
ADDRESSES: The docket for this rulemaking is available for inspection
using the Federal eRulemaking Portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a> and
can be viewed by following that website's instructions.
FOR FURTHER INFORMATION CONTACT: Sarah Ice, Federal Insurance and
Mitigation Administration, FEMA, 400 C St. SW, Washington, DC 20472,
(202) 320-5577, <a href="/cdn-cgi/l/email-protection#8af9ebf8ebe2a4eeeffcebe4eff3a7e3e9efcaecefe7eba4eee2f9a4ede5fc"><span class="__cf_email__" data-cfemail="75061407141d5b111003141b100c581c161035131018145b111d065b121a03">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background and Discussion of the Rule
The National Flood Insurance Act of 1968 (NFIA), as amended (42
U.S.C.
[[Page 67655]]
4001 et seq.), authorizes the Administrator of the Federal Emergency
Management Agency (FEMA) to establish and carry out the National Flood
Insurance Program (NFIP) to enable interested persons to purchase
insurance against loss resulting from physical damage to, or loss of,
real or personal property arising from flood in the United States. See
42 U.S.C. 4011(a). Congress intended the NFIP to be ``a program of
flood insurance with large-scale participation of the Federal
Government and carried out to the maximum extent practicable by the
private insurance industry.'' See 42 U.S.C. 4001(b). Under the NFIA,
FEMA may carry out the NFIP through the facilities of the Federal
Government, using for the purposes of providing flood insurance
coverage, insurance companies and other insurers, insurance agents and
brokers, and insurance adjustment organizations, as fiscal agents of
the United States. See 42 U.S.C. 4071.
Pursuant to this authority, FEMA works closely with the insurance
industry to facilitate the sale and servicing of flood insurance
policies. A person can purchase an NFIP flood insurance policy, also
known as the Standard Flood Insurance Policy (SFIP), either: (1)
Directly from the Federal Government through a direct servicing agent,
or (2) from a private insurance company (referred to as a Write Your
Own (WYO) company) through the WYO Program. The SFIP sets out the terms
and conditions of insurance. FEMA establishes terms of insurance and
rates, which are the same whether purchased directly from the NFIP or
through the WYO Program.
FEMA enters into a standard Financial Assistance/Subsidy
Arrangement (Arrangement) with the WYO companies, which addresses the
terms and conditions for administering the NFIP policies, including
compensation. FEMA publishes the annual Arrangement in the Federal
Register. See 44 CFR 62.23(a). FEMA published the Fiscal Year 2021
Arrangement in March 2020, which became effective October 1, 2020. 85
FR 17339 (Mar. 27, 2020).
FEMA regulations at 44 CFR part 62, the ``Sale of Insurance and
Adjustment of Claims,'' set forth the manner in which NFIP flood
insurance is made available to the public in participating communities,
prescribes the general method by which FEMA exercises its
responsibility regarding the manner in which claims for losses are
paid, and states reasons for which a policy may be nullified or
cancelled and the associated refunds. Section 62.24, ``WYO
participation criteria,'' establishes the criteria with which private
insurance companies wishing to enter or reenter the WYO Program must
comply. Section 62.24(d) outlines requirements that private companies
must follow to demonstrate their plans to market flood insurance
policies.
As part of Sec. 62.24(d) FEMA requires WYO companies to submit a
marketing plan to ensure each company is taking reasonable steps to
market flood insurance to the public. As a result, FEMA has set a goal
for each WYO company to provide positive net new growth of NFIP flood
policies, and encourages these companies by providing growth
incentives. See Fiscal Year 2021 Arrangement, IV.B.3. FEMA's intent
behind the policy growth incentive is to motivate WYO companies to help
FEMA in closing the insurance gap and to reach FEMA's goal of doubling
the number of properties covered against flood by 2022.\1\ Through the
policy growth incentives, FEMA provides to WYO companies a flat dollar
amount for each new policy they write. The actual incentive amount
varies by the extent of net policy growth a WYO company achieves (i.e.,
a larger net growth will lead to a larger incentive). FEMA limits the
total policy growth incentives paid to all WYO companies to two percent
of aggregate written premium for all companies. Id. To qualify for the
incentive, a WYO company must have an overall net policy growth of at
least one policy, and the new policies it writes must be new to the
NFIP, not a renewal previously written by another WYO company. FEMA
pays the incentive to qualifying WYO companies at the end of each
Arrangement year. Id.
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\1\ In 2017, the Federal Insurance and Mitigation Administration
set two ambitious goals: (1) To quadruple the investment in
mitigation across the nation by 2022, and (2) to double the number
of insurance policies across the nation by 2022. These goals have
become the basis for FEMA's Strategic Objective 1.1: Incentivize
investments that reduce risk, including pre-disaster mitigation, and
reduce disaster costs at all levels; and Objective 1.2: Close the
insurance gap. For more information, please see FEMA's Strategic
Plan 2018-2022 at <a href="https://www.fema.gov/sites/default/files/2020-03/fema-strategic-plan_2018-2022.pdf">https://www.fema.gov/sites/default/files/2020-03/fema-strategic-plan_2018-2022.pdf</a>. Accessed Sept. 16, 2021.
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The last sentence of Sec. 62.24(d) states, ``A private insurance
company applying for participation in the WYO program shall also
furnish its Best's Financial Size Category for the purpose of setting
marketing goals.'' Best's, also known as ``AM Best,'' is a credit
rating agency. AM Best rating services assess the creditworthiness of
and/or reports on over 16,000 insurance companies worldwide.\2\
Currently, FEMA does not require companies to provide their specific
financial size category along with their marketing plan. This is
because FEMA does not consider the size of an insurance carrier when
formulating marketing strategies. Section 62.24(d) relates solely to
information needed for marketing, not information relating to assessing
a company's financial strength. If FEMA wanted to assess a carrier's
size, it could do so without requiring information from AM Best.
Carriers of all sizes use a rating agency, whether AM Best or a
competitor, to comply with their state Department of Insurance, so FEMA
could ask for that information if it wanted. In addition, most large
carriers, which comprise the majority of WYO carriers, already have an
AM Best rating and could make that information available. Moreover, in
lieu of rating agency information, FEMA could also use the number of
policies in force to assess carrier size. However, because the AM Best
requirement in Sec. 62.24(d) relates only to information needed to set
marketing goals, and because FEMA neither requires nor uses this
information for marketing, FEMA is removing from its regulations this
requirement upon the public.
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\2\ See <a href="https://www.ambest.com/home/default.aspx">https://www.ambest.com/home/default.aspx</a>. Accessed June
24, 2021.
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II. Regulatory Analysis
A. Administrative Procedure Act
The Administrative Procedure Act (APA) generally requires agencies
to publish a notice of proposed rulemaking in the Federal Register and
provide interested persons the opportunity to submit comments. See 5
U.S.C. 553(b) and (c). The APA provides an exception to this prior
notice and comment requirement for rules of agency organization,
procedure, or practice. 5 U.S.C. 553(b)(3)(A). This final rule is a
procedural rule promulgated for agency efficiency purposes. This action
is limited to updating FEMA's regulations to remove a requirement upon
WYO applicants to furnish a particular piece of information regarding
their financial size for the purpose of setting marketing goals that
FEMA does not actually need from them or use in practice. As such, this
rule simply updates FEMA's regulations to align with current Agency
practice. This rule does not affect the substantive rights or interests
of WYO applicants. The AM Best requirement in the last sentence of
Sec. 62.24(d) was only related to the determination of marketing
strategies; FEMA has never considered information from AM Best in
[[Page 67656]]
determining eligibility to participate in the WYO Program.
Further, the APA generally requires that substantive rules
incorporate a 30-day delayed effective date. 5 U.S.C. 553(d). However,
the APA provides an exception to the 30-day delayed effective date for
rules which grant or recognize an exemption or relieve a restriction. 5
U.S.C. 553(d)(1). This rule relieves a restriction rendering private
insurance companies ineligible to participate in the WYO Program unless
they furnish information on their financial size. As mentioned above,
FEMA does not require this information in practice to determine
eligibility to participate, and is therefore updating its regulations
to remove this unnecessary restriction upon the public.
B. Executive Orders 12866, ``Regulatory Planning and Review'' and
13563, ``Improving Regulation and Regulatory Review''
Executive Orders 12866 (``Regulatory Planning and Review'') and
13563 (``Improving Regulation and Regulatory Review'') direct agencies
to assess the costs and benefits of available regulatory alternatives
and, if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility.
The Office of Management and Budget (OMB) has not designated this
rule a ``significant regulatory action'' under section 3(f) of
Executive Order 12866. Accordingly, the rule has not been reviewed by
OMB. The following paragraphs explain the need for the updated
regulation, the affected population, and the benefits.
Need for Updated Regulation
Current regulations require private insurance companies applying to
participate in the WYO program to furnish their Best's Financial Size
Category for the purpose of setting marketing goals. However, this is
no longer a FEMA practice as FEMA does not set marketing goals for
participating WYO companies. Instead, FEMA utilizes the policy growth
incentives to motivate companies to utilize their resources in the
marketing and sales of new NFIP policies. The purpose and goals of the
policy growth incentives is to (1) increase the number of customers
with flood insurance policies; (2) increase the financial stability of
the program by distributing the policy base and increasing focus on
lower risk policies; and (3) to act as a reinvestment to advance future
growth activities.
The policy growth incentives provide a flat dollar amount for each
new policy a WYO company writes. To qualify for the policy growth
incentives, the company must have an overall net growth and the new
policies must be new to the NFIP and not a renewal previously written
by another WYO Company. The total policy growth incentives paid to WYO
companies will not exceed two percent of the aggregate net written
premium collected by all WYO companies. FEMA will pay those WYO
companies, who qualify for an incentive, at the end of the Arrangement
year.
FEMA is issuing this final rule to remove a requirement that a
private insurance company applying to participate in the WYO program
furnish its Best's Financial Size Category for the purpose of setting
marketing goals.
Affected Population
This rule affects private companies participating in and applying
for participation in the WYO Program. Currently there are 12 of the 56
WYO companies who are either ``Not Rated'' or have never been rated by
AM Best and do not utilize their service. This rule removes the
requirement to provide information that FEMA no longer enforces or uses
in implementing the NFIP. Although FEMA is no longer enforcing this
requirement, 44 WYO companies continue to use AM Best services. FEMA
will no longer require an AM Best rating because FEMA, to the extent
necessary, can accurately assess the size of a carrier for marketing
purposes without the rating. Nevertheless, size is not a consideration
FEMA uses when formulating marketing strategies. FEMA assumes most of
the larger carriers would continue to use AM Best for other purposes,
so FEMA will still be able to review the rating. Accordingly, FEMA
believes this change may have little to no effect on these companies'
choice to use a rating service.
Baseline
FEMA is issuing this rule to align regulations with current FEMA
practice. Accordingly, FEMA is using a no-action baseline to show the
effects of this rule compared to current regulations and practice.
Costs
FEMA expects the only costs from this rule to be the opportunity
cost of time for WYO companies to familiarize themselves with this
final rule. Currently, 56 private companies participate in the WYO
program. FEMA assumes that each company will have two Management
Analysts \3\ spending two hours to read and understand this rule. Using
the hourly mean wage rate of $42.62 per hour with a 1.45 wage
multiplier \4\ results in a total cost of $123.60 ($42.62 x 2 hours x
1.45) per company. Based on a total of 44 companies, the total cost of
this rule is estimated to be $5,438 in the first year.
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\3\ U.S. Department of Labor, Bureau of Labor Statistics, May
2020 National Industry-Specific Occupational Employment and Wage
Estimates, NAICS 524120--Direct Insurance (except Life, Health, and
Medical) Carriers. Available online at: <a href="https://www.bls.gov/oes/2020/may/naics5_524120.htm">https://www.bls.gov/oes/2020/may/naics5_524120.htm</a> (mean wage rate for Management Analysts,
SOC: 13-1111, NAICS 524120). Accessed June 8, 2021.
\4\ Bureau of Labor Statistics, the wage multiplier is
calculated by dividing total compensation for all workers of $38.60
by wages and salaries for all workers of $26.53 per hour yielding a
benefits multiplier of approximately 1.45. Available at <a href="https://www.bls.gov/news.release/archives/ecec_03182021.htm">https://www.bls.gov/news.release/archives/ecec_03182021.htm</a>. Accessed June
8, 2021.
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Distributional Effects
This rule may result in distributional impacts to insurance rating
companies by removing a requirement that FEMA does not impose in
implementing the NFIP. This will simplify the Code of Federal
Regulations and reduce confusion, and further align the regulations
with FEMA's current exercise of its authority.
Rating services are an important part of large insurance carriers'
business and FEMA believes their use of AM Best is not predicated on
the requirement in 44 CFR 62.24(d) for a size rating. Rather, large
insurance carriers use the rating to not only market their company to
policyholders but also to potential investors. It can also be required
for State regulatory purposes. In most instances they choose to use
multiple rating services. Moreover, the ``size'' category is not the
only service provided by the rating agencies as it is a small part of a
larger service. As such, FEMA does not believe this change will affect
large WYO companies' use of AM Best. It is possible that small WYO
companies who have continued to use AM Best may to choose to use the
services of a competitor. However, FEMA expects that these companies
will continue to use the services of a rating company as they have
continued to pay for AM Best services despite FEMA no longer enforcing
a requirement to do so. Accordingly, this rule may result in
distributional impacts as some WYOs may switch from AM Best to a
different rating company or use no rating company at all. There are no
impacts to
[[Page 67657]]
the Federal government associated with this rule.
Conclusion
FEMA estimates this final rule will result in total costs to WYO
companies of $5,438 in the first year. There are no impacts to the
Federal government associated with this rule. FEMA believes this change
may have little to no effect on companies' choice to use a rating
service, but the rule may result in distributional impacts as some WYOs
may switch from AM Best to a different rating company.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), and
section 213(a) of the Small Business Regulatory Enforcement Fairness
Act of 1996, Public Law 104-121, 110 Stat. 847, 858-9 (Mar. 29, 1996)
(5 U.S.C. 601 note) require that special consideration be given to the
effects of regulations on small entities. The RFA applies only when an
agency is ``required by section 553 . . . to publish general notice of
proposed rulemaking for any proposed rule.'' 5 U.S.C. 603(a). An RFA
analysis is not required for this rulemaking because FEMA is not
required to publish a notice of proposed rulemaking.
D. Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 658, 1501-1504,
1531-1536, 1571, pertains to any rulemaking which is likely to result
in the promulgation of any rule that includes a Federal mandate that
may result in the expenditure by State, local, and Tribal governments,
in the aggregate, or by the private sector, of $100 million (adjusted
annually for inflation) or more in any one year. If the rulemaking
includes a Federal mandate, the Act requires an agency to prepare an
assessment of the anticipated costs and benefits of the Federal
mandate. The Act also pertains to any regulatory requirements that
might significantly or uniquely affect small governments. Before
establishing any such requirements, an agency must develop a plan
allowing for input from the affected governments regarding the
requirements.
FEMA has determined that this rulemaking will not result in the
expenditure by State, local, and Tribal governments, in the aggregate,
nor by the private sector, of $100,000,000 or more in any one year as a
result of a Federal mandate, and it will not significantly or uniquely
affect small governments. Therefore, no actions are deemed necessary
under the provisions of the Unfunded Mandates Reform Act of 1995.
E. Paperwork Reduction Act of 1995
As required by the Paperwork Reduction Act of 1995 (PRA), Public
Law 104-13, 109 Stat. 163, (May 22, 1995) (44 U.S.C. 3501 et seq.),
FEMA may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless FEMA obtains approval
from the Office of Management and Budget (OMB) for the collection and
the collection displays a valid OMB control number. FEMA has determined
that this rulemaking does not contain any collections of information as
defined by that Act.
F. Privacy Act/E-Government Act
Under the Privacy Act of 1974, 5 U.S.C. 552a, an agency must
determine whether implementation of a proposed regulation will result
in a system of records. A ``record'' is any item, collection, or
grouping of information about an individual that is maintained by an
agency, including, but not limited to, his/her education, financial
transactions, medical history, and criminal or employment history and
that contains his/her name, or the identifying number, symbol, or other
identifying particular assigned to the individual, such as a finger or
voice print or a photograph. See 5 U.S.C. 552a(a)(4). A ``system of
records'' is a group of records under the control of an agency from
which information is retrieved by the name of the individual or by some
identifying number, symbol, or other identifying particular assigned to
the individual. An agency cannot disclose any record which is contained
in a system of records except by following specific procedures.
The E-Government Act of 2002, 44 U.S.C. 3501 note, also requires
specific procedures when an agency takes action to develop or procure
information technology that collects, maintains, or disseminates
information that is in an identifiable form. This Act also applies when
an agency initiates a new collection of information that will be
collected, maintained, or disseminated using information technology if
it includes any information in an identifiable form permitting the
physical or online contacting of a specific individual.
The system of record for the NFIP, DHS/FEMA-003--National Flood
Insurance Program Files, was published in the Federal Register on May
19, 2014 (79 FR 28747). This rule does not impact this existing system
of record, nor does it create a new system of record. Therefore, this
rule does not require coverage under an existing or new Privacy Impact
Assessment or System of Records Notice.
G. Executive Order 13175, ``Consultation and Coordination With Indian
Tribal Governments''
Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments,'' 65 FR 67249 (Nov. 9, 2000), applies to agency
regulations that have Tribal implications, that is, regulations that
have substantial direct effects on one or more Indian Tribes, on the
relationship between the Federal Government and Indian Tribes, or on
the distribution of power and responsibilities between the Federal
Government and Indian Tribes. Under this Executive order, to the extent
practicable and permitted by law, no agency shall promulgate any
regulation that has Tribal implications, that imposes substantial
direct compliance costs on Indian Tribal governments, and that is not
required by statute, unless funds necessary to pay the direct costs
incurred by the Indian Tribal government or the Tribe in complying with
the regulation are provided by the Federal Government, or the agency
consults with Tribal officials.
FEMA has reviewed this final rule under Executive Order 13175 and
has determined that it does not have a substantial direct effect on one
or more Indian tribes, on the relationship between the Federal
Government and Indian Tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian Tribes. This
rule relieves a requirement on private insurance companies to furnish
information on their financial size to participate in the WYO program.
The removal of this requirement will not affect the substantive rights
or interests of Indian Tribal governments.
H. Executive Order 13132, ``Federalism''
Executive Order 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999),
sets forth principles and criteria that agencies must adhere to in
formulating and implementing policies that have federalism
implications, that is, regulations that have substantial direct effects
on the States, on the relationship between the National Government and
the States, or on the distribution of power and responsibilities among
the various levels of government. Federal agencies must closely examine
the statutory authority supporting any action that would limit the
policymaking discretion of the States, and to the extent practicable,
must consult with State and local officials before implementing any
such action.
[[Page 67658]]
FEMA has determined that this rulemaking does not have a
substantial direct effect on the States, on the relationship between
the National Government and the States, or on the distribution of power
and responsibilities among the various levels of government, and
therefore does not have federalism implications as defined by the
Executive Order.
I. Executive Order 11988, ``Floodplain Management''
Pursuant to Executive Order 11988, ``Floodplain Management,'' 42 FR
26951 (May 24, 1977), each agency must provide leadership and take
action to reduce the risk of flood loss, to minimize the impact of
floods on human safety, health and welfare, and to restore and preserve
the natural and beneficial values served by floodplains in carrying out
its responsibilities for (1) acquiring, managing, and disposing of
Federal lands and facilities; (2) providing Federally undertaken,
financed, or assisted construction and improvements; and (3) conducting
Federal activities and programs affecting land use, including but not
limited to water and related land resources planning, regulating, and
licensing activities. In carrying out these responsibilities, each
agency must evaluate the potential effects of any actions it may take
in a floodplain; ensure that its planning programs and budget requests
reflect consideration of flood hazards and floodplain management; and
prescribe procedures to implement the policies and requirements of the
Executive order.
Before promulgating any regulation, an agency must determine
whether the proposed regulations will affect a floodplain(s), and if
so, the agency must consider alternatives to avoid adverse effects and
incompatible development in the floodplain(s). If the head of the
agency finds that the only practicable alternative consistent with the
law and with the policy set forth in Executive Order 11988 is to
promulgate a regulation that affects a floodplain(s), the agency must,
prior to promulgating the regulation, design or modify the regulation
to minimize potential harm to or within the floodplain, consistent with
the agency's floodplain management regulations. It must also prepare
and circulate a notice containing an explanation of why the action is
proposed to be located in the floodplain.
The purpose of this rule is to remove a requirement on private
insurance companies to furnish information on their financial size to
participate in the WYO program. In accordance with 44 CFR part 9,
``Floodplain Management and Protection of Wetlands,'' FEMA determines
that the changes proposed in this rule would not have an effect on
floodplains.
J. Executive Order 11990, ``Protection of Wetlands''
Executive Order 11990, ``Protection of Wetlands,'' 42 FR 26961 (May
24, 1977) sets forth that each agency must provide leadership and take
action to minimize the destruction, loss or degradation of wetlands,
and to preserve and enhance the natural and beneficial values of
wetlands in carrying out the agency's responsibilities. These
responsibilities include (1) acquiring, managing, and disposing of
Federal lands and facilities; and (2) providing federally undertaken,
financed, or assisted construction and improvements; and (3) conducting
Federal activities and programs affecting land use, including but not
limited to water and related land resources planning, regulating, and
licensing activities. Each agency, to the extent permitted by law, must
avoid undertaking or providing assistance for new construction located
in wetlands unless the head of the agency finds (1) that there is no
practicable alternative to such construction, and (2) that the proposed
action includes all practicable measures to minimize harm to wetlands
which may result from such use. In making this finding, the head of the
agency may take into account economic, environmental and other
pertinent factors.
In carrying out the activities described in Executive Order 11990,
each agency must consider factors relevant to a proposal's effect on
the survival and quality of the wetlands. These include public health,
safety, and welfare, including water supply, quality, recharge and
discharge; pollution; flood and storm hazards; sediment and erosion;
maintenance of natural systems, including conservation and long term
productivity of existing flora and fauna, species and habitat diversity
and stability, hydrologic utility, fish, wildlife, timber, and food and
fiber resources. They also include other uses of wetlands in the public
interest, including recreational, scientific, and cultural uses. The
purpose of this rule is to remove a requirement on private insurance
companies to furnish information on their financial size to participate
in the WYO program. In accordance with 44 CFR part 9, ``Floodplain
Management and Protection of Wetlands,'' FEMA determines that the
changes in this rule would not have an effect on wetlands.
K. National Environmental Policy Act of 1969 (NEPA)
Under the National Environmental Policy Act of 1969 (NEPA), as
amended, 42 U.S.C. 4321 et seq., an agency must consider impacts of its
actions on the environment and prepare an environmental assessment or
environmental impact statement for any rulemaking that has potential to
significantly affect the quality of the human environment. A
categorical exclusion (CATEX) is a form of NEPA compliance that applies
to actions that do not need to undergo detailed environmental analysis
because it has been determined through experience that they typically
do not have a significant impact on the human environment. An agency
may apply a CATEX if the project fits within the identified criteria of
the CATEX.
Rulemaking is a major Federal action subject to NEPA. CATEX M1(d)
included in the list of categorical exclusions found in the Department
of Homeland Security Instruction Manual 023-01-001-01, Revision 01,
Implementation of the National Environmental Policy Act, Appendix A,
issued November 6, 2014, covers activities in support of FEMA's
administration of the National Flood Insurance Program, including
revisions WYO participation criteria. This rule for the NFIP meets
CATEX M1(d) and does not require further analysis under NEPA.
L. Congressional Review of Agency Rulemaking
Under the Congressional Review of Agency Rulemaking Act (CRA), 5
U.S.C. 801-808, before a rule can take effect, the Federal agency
promulgating the rule must submit to Congress and to the Government
Accountability Office (GAO) a copy of the rule; a concise general
statement relating to the rule, including whether it is a major rule;
the proposed effective date of the rule; a copy of any cost-benefit
analysis; descriptions of the agency's actions under the Regulatory
Flexibility Act and the Unfunded Mandates Reform Act; and any other
information or statements required by relevant executive orders.
FEMA has sent this final rule to the Congress and to GAO pursuant
to the CRA. The rule is not a ``major rule'' within the meaning of the
CRA. It will not have an annual effect on the economy of $100,000,000
or more; it will not result in a major increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies, or geographic regions; and it will not have
[[Page 67659]]
significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based
enterprises to compete with foreign-based enterprises in domestic and
export markets.
List of Subjects in 44 CFR Part 62
Claims, Flood insurance, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Federal Emergency
Management Agency amends 44 CFR part 62 as follows:
PART 62--SALE OF INSURANCE AND ADJUSTMENT OF CLAIMS
0
1. The authority citation for part 62 continues to read as follows:
Authority: 42 U.S.C. 4001 et seq.; 6 U.S.C. 101 et seq.
Subpart C--Write-Your-Own (WYO) Companies
Sec. 62.24 [Amended]
0
2. In Sec. 62.24, amend paragraph (d) by removing the last sentence.
Deanne Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2021-25956 Filed 11-26-21; 8:45 am]
BILLING CODE 9111-52-P
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</html>Indexed from Federal Register on November 29, 2021.
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