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119-hr-5500119th CongressWALLET

National Flood Insurance Program Administrative Reform Act of 2025

Sponsored By: Representative Velázquez, Nydia M. [D-NY-7]

Introduced

Summary

Tightening NFIP claims rules and oversight to speed payments and boost transparency. This bill would create faster claim deadlines, a formal administrative appeal track, stronger fraud penalties, a pilot to inspect preexisting structural conditions, and a new Federal Flood Insurance Advisory Committee to advise the NFIP Administrator.

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  • Policyholders and families would see quicker decisions and clearer information. Initial claim determinations would be required within 120 days after a signed proof of loss, with a 30 day extension for extraordinary circumstances, and the bill would require a standard policy disclosure and acknowledgment sheet plus broader access to unredacted technical assistance reports on request.
  • Write Your Own insurers would be allowed to run a voluntary pilot to investigate preexisting structural conditions and may levy a surcharge to cover investigation costs, with interim reporting due by December 31, 2027 and a final report due March 31, 2029; the pilot would stop issuing new policies after December 31, 2028.
  • Oversight and integrity rules would tighten. The bill would create a criminal penalty for knowingly false flood-claim statements, require exhaustion of administrative remedies before litigation and toll the one-year statute of limitations during appeals, limit reliance on noncompliant technical reports, prohibit hiring suspended or disbarred attorneys, strengthen litigation cost oversight for WYOs, require adequate staffing for the Office of the Flood Insurance Advocate, and establish a Federal Flood Insurance Advisory Committee with diverse stakeholder representation and annual reporting to Congress.

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Bill Overview

Analyzed Economic Effects

7 provisions identified: 4 benefits, 0 costs, 3 mixed.

Tougher anti-fraud and legal oversight

If enacted, it would be a crime to knowingly make false statements or forge reports to get NFIP claim payments. Administrative remedies would need to be used before going to court, and violators would be referred to State licensing boards. The NFIP Administrator would oversee lawsuits handled by insurers and could deny reimbursement for unreasonable legal costs. A joint defense arrangement would be allowed to coordinate cases, with compliance starting within 12 months. Insurers and program entities could not newly hire attorneys who have been suspended or disbarred.

Optional pre-flood home checks, possible surcharge

If enacted, participating insurers could offer a voluntary check for preexisting structural issues that might later lead to a claim denial. You would have to request it; if the first review is unclear, they could do an on‑site inspection. A surcharge set by the NFIP Administrator could be added to participating policies to cover these costs. You and the Administrator would receive a report with findings. The pilot would stop issuing new pilot policies after December 31, 2028, with an interim report due December 31, 2027 and a final report due March 31, 2029.

Repeal two 2004 flood insurance rules

If enacted, Sections 202 and 203 of the 2004 Flood Insurance Reform Act would be repealed. This would remove the rules in those sections; this summary does not include replacements. The effect on policyholders and program duties could vary depending on what those sections currently require.

Faster decisions and formal claim appeals

If enacted, the NFIP would have 120 days to approve or deny your claim after you submit a signed proof of loss, with possible 30‑day extensions for extraordinary cases. Approved claims would be paid as soon as possible. You would need to use a new administrative appeal before suing, and the appeal decision would be due within 120 days after the agency acknowledges it, with possible 30‑day extensions. Your one‑year deadline to sue would pause while your appeal is pending. These timelines would apply to pending and new claims.

More transparency in flood claims and policies

If enacted, you could request a full, unredacted copy of any technical report used to decide your claim. The NFIP would rely only on final reports prepared in line with State and Federal licensing rules. Every policy would include a plain‑language disclosure, and applications would ask you to accept or decline optional coverages. The disclosure would not change coverage terms, and a policy could still be issued even if you do not complete the acknowledgment. The Administrator would have to fully staff the Flood Insurance Advocate within 180 days.

New advisory panel for flood insurance

If enacted, a Federal Flood Insurance Advisory Committee would advise on rates, risk, claims, sales, and operations. Members would include insurers, a State insurance regulator, an actuary, agents, a claims expert, a consumer advocate, and an academic, with geographic balance. The committee would meet at least twice a year and could discuss non‑public issues while sharing public summaries. The Administrator would report to Congress and OMB each year on recommendations and actions taken.

Shift funds into NFIP reserve

If enacted, certain amounts collected under section 1310A could be credited to the NFIP Reserve Fund. Those funds would then be available for the uses listed in section 1310(d)(1). This is an internal finance change and does not set new household fees.

Sponsors & CoSponsors

Sponsor

Velázquez, Nydia M. [D-NY-7]

NY • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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