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Title 42, The Public Health and WelfareRelease 119-110

§4055 Reinsurance Coverage

Title 42 › CHAPTER 50 — NATIONAL FLOOD INSURANCE › SUBCHAPTER II — ORGANIZATION AND ADMINISTRATION OF FLOOD INSURANCE PROGRAM › Part A — Industry Program With Federal Financial Assistance › § 4055

Last updated Sep 22, 2026|Official source

Summary

The Administrator can get reinsurance so the flood-insurance pool does not have to pay every big loss itself. The Administrator may buy extra coverage from private companies at rates and terms they find reasonable to keep the program able to pay claims. That extra coverage must be bought under a contract or other arrangement, and the pool pays whatever premium or fee is needed to cover expected costs. The Administrator can set how much risk the pool keeps versus what is reinsured, and any claims above the pool’s share must be sent together as a portfolio under rules the Administrator sets.

Full Legal Text

Title 42, §4055

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

(a)Availability for excess losses
(1)In general
The Administrator is authorized to take such action as may be necessary in order to make available, to the pool formed or otherwise created under section 4051 of this title, reinsurance for losses (due to claims for proved and approved losses covered by flood insurance) which are in excess of losses assumed by such pool in accordance with the excess loss agreement entered into under subsection (c).
(2)Private reinsurance
The Administrator is authorized to secure reinsurance of coverage provided by the flood insurance program from the private market at rates and on terms determined by the Administrator to be reasonable and appropriate, in an amount sufficient to maintain the ability of the program to pay claims.
(b)Availability pursuant to contract, agreement, or other arrangement; payment of premium, fee, or other charge
Such reinsurance shall be made available pursuant to contract, agreement, or any other arrangement, in consideration of such payment of a premium, fee, or other charge as the Administrator finds necessary to cover anticipated losses and other costs of providing such reinsurance.
(c)Excess loss agreement; negotiation
The Administrator is authorized to negotiate an excess loss agreement, from time to time, under which the amount of flood insurance retained by the pool, after ceding reinsurance, shall be adequate to further the purposes of this chapter, consistent with the objective of maintaining appropriate financial participation and risk sharing to the maximum extent practicable on the part of participating insurance companies and other insurers.
(d)Submission of excess losses on portfolio basis
All reinsurance claims for losses in excess of losses assumed by the pool shall be submitted on a portfolio basis by such pool in accordance with terms and conditions established by the Administrator.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

This chapter, referred to in subsec. (c), 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—Subsec. (a). Pub. L. 112–141, § 100232(d)(3), designated existing provisions as par. (1), inserted heading, substituted “The Administrator” for “The Director” and added par. (2). Subsecs. (b) to (d). Pub. L. 112–141, § 100238(b)(1), substituted “Administrator” for “Director”. 1983—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. § 4055

Title 42, The Public Health and Welfare

Last Updated

Sep 22, 2026

Release point: 119-110