Policy Issuance 3-96
May 13, 1996
Subject: NFIP Premium Refund Rules for Zone and Base Flood Elevation Revisions
Background: Policy Issuance 4-95, issued on September 12, 1995, clarified the misrating refund rule and set forth the situations where NFIP multiple year refunds are authorized. Misratings were stated to include the effect of two kinds of map changes: zone revisions and Base Flood Elevation revisions. Reference was made to the refund rule in the Flood Insurance Manual stating that for zone revisions, "rating may be revised only for the current policy year." Then the Policy Issuance permitted for all valid refund reasons, including the misrating reason, premium refunds for the current and one prior year, with two exception for longer periods.
The Flood Insurance Manual effective April 30, 1996, provides refund rules for a "ZONE REVISION" on page END 1 and for a "RATING ERROR" on page END 2. The ZONE REVISION rule states that the rating "may be revised for the current and 1 prior policy year." The RATING ERROR rule states that it includes a zone revision and a Base Flood Elevation revision and provides that "Rating errors will be corrected for the current and 1 prior policy year only..."
Policy Statement: This is to clarify that refunds based on zone revisions and Base Flood Elevation revisions are permitted for a prior year only where the endorsement requesting the refund is filed in a policy year after the policy year in which the map change became effective. Where the endorsement requesting the refund is filed in the policy year in which the map change becomes effective, the refund is for that policy year only. The refund for the policy year in which the map change becomes effective is for the remainder of the policy year, beginning on the date of the map change.
Examples:
Policy renewed January 1, 1996; map change effective May 1, 1996; endorsement filed June 1, 1996.
The refund for the premium reduction would be for the period May 1, 1996, to January 1, 1997.
Policy renewed January 1, 1996; map change effective May 1, 1996; policy renewed January 1, 1997; endorsement filed June 1, 1997.
The refund for the premium reduction would be for the period May 1, 1996, to January 1, 1998.
Policy renewed January 1, 1996; map change effective May 1, 1996; policy renewed January 1, 1997, and January 1, 1998; endorsement filed June 1, 1998.
The refund for the premium reduction would be for the two policy years January 1, 1997 - 1998, and January 1, 1998 - 1999.
Last Modified: Thursday, 25-May-2006 16:35:00 EDT