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Title 42, The Public Health and WelfareRelease 119-110

§4018 Operating Costs and Allowances; Definitions

Title 42 › CHAPTER 50 — NATIONAL FLOOD INSURANCE › SUBCHAPTER I — THE NATIONAL FLOOD INSURANCE PROGRAM › § 4018

Last updated Sep 22, 2026|Official source

Summary

The Administrator must negotiate with insurance industry representatives to create two schedules in regulations: one listing allowable operating costs for risk-sharing and other insurers and for agents, brokers, and adjusters who participate on a non-risk-sharing basis, and one listing operating allowances for risk-sharing and other insurers. These schedules can be paid under subchapter II. Operating costs: direct, necessary selling and servicing expenses, pay or commissions, loss-adjustment costs, and similar direct expenses. Operating allowances: reasonable profit and contingency amounts the Administrator approves.

Full Legal Text

Title 42, §4018

The Public Health and Welfare, Source: USLM XML via OLRC

(a)The Administrator shall from time to time negotiate with appropriate representatives of the insurance industry for the purpose of establishing—
(1)a current schedule of operating costs applicable both to risk-sharing insurance companies and other insurers and to insurance companies and other insurers, insurance agents and brokers, and insurance adjustment organizations participating on other than a risk-sharing basis, and
(2)a current schedule of operating allowances applicable to risk-sharing insurance companies and other insurers,
which may be payable in accordance with the provisions of subchapter II, and such schedules shall from time to time be prescribed in regulations.
(b)For purposes of subsection (a)—
(1)the term “operating costs” shall (without limiting such term) include—
(A)expense reimbursements covering the direct, actual, and necessary expenses incurred in connection with selling and servicing flood insurance coverage;
(B)reasonable compensation payable for selling and servicing flood insurance coverage, or commissions or service fees paid to producers;
(C)loss adjustment expenses; and
(D)other direct, actual, and necessary expenses which the Administrator finds are incurred in connection with selling or servicing flood insurance coverage; and
(2)the term “operating allowances” shall (without limiting such term) include amounts for profit and contingencies which the Administrator finds reasonable and necessary to carry out the purposes of this chapter.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

This chapter, referred to in subsec. (b)(2), was in the original a reference to “this title” meaning title XIII of Pub. L. 90–448, Aug. 1, 1968, 82 Stat. 572, known as the National Flood Insurance Act of 1968, which is classified principally to this chapter. For complete classification of this Act to the Code, see

Short Title

note set out under section 4001 of this title and Tables.

Amendments

2012—Subsecs. (a), (b)(1)(D), (2). Pub. L. 112–141 substituted “Administrator” for “Director”. 1983—Subsecs. (a), (b)(1)(D), (2). Pub. L. 98–181 substituted “Director” for “Secretary” wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 120 days following Aug. 1, 1968, or such later date prescribed by the Secretary but in no event more than 180 days following Aug. 1, 1968, see section 1377 of Pub. L. 90–448, set out as a note under section 4001 of this title.

Transfer of Functions

For transfer of all functions, personnel, assets, components, authorities, grant programs, and liabilities of the Federal Emergency Management Agency, including the functions of the Under Secretary for Federal Emergency Management relating thereto, to the Federal Emergency Management Agency, see section 315(a)(1) of Title 6, Domestic Security. For

Transfer of Functions

, personnel, assets, and liabilities of the Federal Emergency Management Agency, including the functions of the Director of the Federal Emergency Management Agency relating thereto, to the Secretary of Homeland Security, and for treatment of related references, see former section 313(1) and section 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.

Reference

Citations & Metadata

Citation

42 U.S.C. § 4018

Title 42, The Public Health and Welfare

Last Updated

Sep 22, 2026

Release point: 119-110