Among other things, HFIAA contained the following with respect to  insurance:  created a premium surcharge that would be deposited in the reserve  fund (generally, a $25 surcharge for primary residences and a $250  surcharge for others);  restored grandfathered rates removed by the Biggert-Waters Act,  effective retroactive to the Biggert-Waters Act’s enactment on July 6,  2012; did not affect the schedule for phasing out subsidized policies for  properties such as secondary residences, businesses, and severe  repetitive loss properties (rates would continue to increase at 25  percent a year);  reinstated subsidized rates for properties that were purchased after or  not insured as of July 6, 2012, that had been removed by the Biggert- Waters Act, but required that FEMA increase premium rates on these  and many other types of subsidized policies by at least 5 percent up  to the caps established by HFIAA for all policies annually;  limited average increases for a risk class to 15 percent and individual  policy increases to 18 percent; and  required FEMA to issue refunds directly to those who paid NFIP  premiums under the Biggert-Waters Act in excess of rates set under  HFIAA. FEMA is required to provide TMAC’s review report  to Congress. FEMA Has Prioritized, Tracked, and Communicated Its Implementation of the Biggert-Waters Act, as Amended by HFIAA

To manage its implementation of changes required by the Biggert-Waters  Act and HFIAA, FEMA has: established implementation of the changes as a strategic objective in  its 2014-2018 strategic plan;  ranked the implementation of HFIAA requirements in terms of priority; established mechanisms for coordinating internally on prioritizing and  tracking its implementation efforts; and  communicated regularly with external stakeholders. This priority is consistent with the intent of HFIAA,  which sought to address affordability concerns by postponing or repealing  some Biggert-Waters Act requirements, including provisions that phased  out some discounted premiums (subsidized and grandfathered rates). FEMA has established an integration team to oversee its implementation  efforts and created regularly updated tracking documents and indicators  to prioritize and track implementation. Steps that FEMA has taken to manage its implementation of the Biggert- Waters Act, as amended by HFIAA, are consistent with relevant federal  internal control standards. FEMA Faces Challenges in Implementing the Biggert-Waters Act and HFIAA Requirements

FEMA officials and representatives of flood insurance organizations we  interviewed cited a number of challenges related to FEMA’s  implementation of the required changes, including the complexity of the  legislation and timing of the enactment of HFIAA, resource constraints,  and the competing program goals of financial solvency and affordability. The implementation of key Biggert-Waters Act and HFIAA  mapping requirements must be coordinated with an expert council that  was recently established in July 2014 and held its first meeting in  September 2014. In February and September 2015,  the National Academy of Sciences (NAS) is to deliver two reports that  identify approaches for an NFIP affordability framework and nationwide  affordability study, respectively. FEMA Has Made Some Insurance-Related Changes but Lacks the Data Needed for Full Implementation

FEMA considered that it had fully met requirements for completing close  to half of the Biggert-Waters Act sections (16 of 34) and about one-third  of the HFIAA sections (8 of 26) as of December 2014. Mapping-Related Notifications and Appeals

FEMA has made progress in providing mapping-related notifications and  is clarifying the appeals reimbursement HFIAA requires. FEMA has executed almost all mitigation assistance requirements under  the Biggert-Waters Act. FEMA actuaries also told us that they  were considering methods for providing access to policyholders for any  property-level data that were available. Affordability Studies

FEMA has taken some action on the affordability studies required by the  Biggert-Waters Act and HFIAA, but data challenges have delayed  progress. As discussed  earlier, FEMA currently cannot distinguish among nonresidential  structures, such as businesses and nonprofits. Appendix I: Objectives, Scope, and Methodology

Our objectives in this report were to describe (1) the Federal Emergency  Management Agency’s (FEMA) management of the implementation of the  Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act)  and Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) and  associated challenges and (2) the status of FEMA’s implementation of  selected requirements, including whether the agency has met required  time frames and established goals. We interviewed FEMA officials  responsible for implementing the Biggert-Waters Act, as amended by  HFIAA, and representatives from the same 10 organizations discussed  above to obtain their perspectives on FEMA’s implementation efforts. We conducted additional interviews with FEMA officials and reviewed  FEMA documentation on the status of these selected requirements. Appendix II: Selected Requirements from the Biggert-Waters Act and Homeowner Flood Insurance Affordability Act (HFIAA)

Appendix II: Selected Requirements from the  Biggert-Waters Act and Homeowner Flood  Insurance Affordability Act (HFIAA)
The following table contains selected requirements from the Biggert- Waters Flood Insurance Reform Act (Biggert-Waters Act) and the  Homeowner Flood Insurance Affordability Act (HFIAA) that the Federal  Emergency Management Agency (FEMA) is required to implement.
Why GAO Did This Study

NFIP, which is administered by FEMA, has faced significant financial and management challenges over the years. The Biggert-Waters Act, enacted in July 2012, instituted provisions to help strengthen NFIP's future financial solvency and administrative efficiency. For example, it required FEMA to phase out almost all discounted insurance premiums and establish a reserve fund. As implementation proceeded, however, affected communities raised concerns about some Biggert-Waters Act requirements. HFIAA was enacted in March 2014 and sought to address affordability concerns by repealing or altering some Biggert-Waters Act requirements. GAO was asked to examine the status of FEMA's implementation of the requirements established by the Biggert-Waters Act, as amended by HFIAA.
This report describes (1) FEMA's management of the acts' implementation and associated challenges and (2) the status of FEMA's implementation of selected requirements from the acts. GAO analyzed the Biggert-Waters Act and HFIAA; reviewed FEMA information on the prioritization and tracking of implementation efforts in relation to relevant internal control standards; and reviewed data and documentation on FEMA's status in implementing the Biggert-Waters Act, as amended by HFIAA, in relation to established time frames. Finally, GAO interviewed FEMA officials and representatives from 10 organizations with flood insurance expertise who were selected based on experience and type of organization.

What GAO Found

The Federal Emergency Management Agency (FEMA) has established some practices for managing its implementation of required changes under the Biggert-Waters Flood Insurance Reform Act (Biggert-Waters Act), as amended by the Homeowner Flood Insurance Affordability Act (HFIAA). Consistent with related federal internal control standards, FEMA has collaborated with stakeholders on prioritizing legislative requirements and developed methods to track the status of its implementation efforts. For example, FEMA formed a team of key staff to oversee these efforts and monitor progress through a tracking document that is updated regularly. However, FEMA and representatives of organizations with flood insurance expertise cited a number of challenges that FEMA faces in implementing the new requirements, including resource issues, the complexity of the legislation, and the need to balance the National Flood Insurance Program's (NFIP) financial solvency and affordability goals.
FEMA estimated that it had met requirements to complete almost half of Biggert-Waters Act sections and about one-third of HFIAA sections as of December 2014, and was taking action on others, including required studies. For example,
FEMA prioritized and implemented important HFIAA rate changes that repealed some Biggert-Waters Act rate increases and also initiated refunds to policyholders. However, data limitations have delayed implementation of some other requirements. For example, FEMA is required to make rate changes for business properties. Currently, FEMA cannot distinguish among nonresidential property policies for businesses, nonprofits, and others. FEMA anticipates collecting more specific data in late 2015 that will allow it to make the required adjustments.
As required by the Biggert-Waters Act, FEMA established the Technical Mapping Advisory Council (TMAC), which held its first meeting in September 2014, and anticipates implementing additional Biggert-Waters Act mapping requirements over the next several years.
FEMA reported that it had almost fully implemented Biggert-Waters Act mitigation assistance requirements and had begun researching alternative mitigation methods, as required by HFIAA.
FEMA had also begun implementing outreach and affordability requirements, including establishing an interim Office of the Flood Insurance Advocate.
FEMA also made progress in providing mapping-related notifications to Congress. FEMA is considering methods for providing access to any available property-level data to policyholders that would help clearly communicate flood risk. FEMA has taken some action on an affordability study that the two laws require, but data challenges have delayed progress. The study is required to analyze the impact of eliminating all discounted NFIP premiums (such as subsidized premiums), but FEMA cannot identify all properties that are receiving the discounts. In February and September 2015, the National Academy of Sciences is to deliver two reports that identify approaches for an NFIP affordability framework and nationwide affordability study, respectively.