FEMA updates flood assessment system

The US Federal Emergency Management Agency (FEMA) is redesigning the Community Rating System (CRS) for the National Flood Insurance Program (NFIP).

Work to redesign the agency, which began in 2022, was released for public comment in July. The comment period ended on September 9. FEMA plans to implement an updated CRS in 2025 and will implement it in 2026, according to Tony Hake, a FEMA official who addressed the National Association of Insurance Commissioners summer meeting last month.

More than 1,500 communities participate CRSa program that recognizes and encourages community floodplain management practices that exceed NFIP requirements.

Stakeholder feedback led FEMA to make “bold programmatic changes” to CRS, according to Hake. The program’s redesign includes revisions to its scoring and operational elements, Hake said.

The US Government Accountability Office (GAO) has made two recommendations for changes to the CRS. The first is to calculate a community’s rating “based on community activities that reduce flood risk,” Hake said. The GAO wants the program to include premium reductions based on actual assessments of risk reduction, which means CRS must be actuarially sound, according to Hake.

The second recommendation is to evaluate other ways to incentivize desirable community activities, even without actuarial justification, so they can be a basis for rebates, Hake added.

The CRS redesign intends to support “communities accept measurable payments, make sustainable progress, reduce future flood risk, embed equity as a foundation in the program, incentivize communities to promote homeowners to participate in flood insurance to reduce risk financial loss caused by floods. and provide a participant-centered and streamlined program,” he said.