Policy Issuance 1-00
Subject: Renewals Ineligible for Preferred Risk Policies
Background: Policy Issuance 3-99 on this same subject extended the zone grandfather for Preferred Risk Policies (PRP) in AR zones in California through August 4, 2000. Los Angeles County officials have advised us in recent discussions that the levee restoration project that was the basis for the AR zone designation will be complete in October 2001. This means that most of the PRPs in this area will expire during the summer just before the levee project is completed. Under the provisions of Policy Issuance 3-99, the PRPs would have to be converted to the higher priced standard X zone policy at that time, just months before they would again be eligible for PRPs.
Policy Decision: The Mitigation Division has elected to extend the zone grandfather for PRPs in the AR zones in California for a period of two additional years. This action will relieve the administrative burden on policyholders, insurance agents, and insurance companies of converting the PRPs to standard policies only to convert them back several months later. It will also allow us adequate time to revise the Flood Insurance Rate Maps for the affected communities.
Additionally, it should be noted that there may be certain specific areas that will change from AR to A99 zones before the completion of the project. The extension of the zone grandfather also applies to those policyholders.
Jo Ann Howard
Administrator
Mitigation Division
Last Modified: Thursday, 25-May-2006 14:50:37 EDT