The FEMA Review Council, co-chaired by the DHS Secretary and DOD Secretary, has yet to reschedule its final meeting, despite the current executive order-established deadline of March 25, 2026.   However, the draft FEMA Review Council report may be reviewed here.

Recommendation #9 proposes to “Reform the National Flood Insurance Program (NFIP) for Financial Stability and Risk Resilience.”  The report’s appendix proposes specific “solutions” for NFIP, as listed below:

1. Empower Communities (Better Land-Use Policies): “Enhance NFIP participation standards administratively to support intuitive land use choices that result in predictable post-flood outcomes for communities. FEMA could explore ways to modernize the Community Rating System incentives to reward integration of property-level resilience activities; align floodplain standards with this proposal’s modernization of mapping data; and provide support to states to promote risk communication with local land-use planning.”

2. Modernize Risk Assessment (Update Risk Rating 2.0 & Improve Maps):  “The NFIP’s updated pricing methodology, Risk Rating 2.0, leveraged advanced technology and data sources to deliver fairer, more individualized rates, must continue to be implemented and updated based on better information and science.   The program must also improve the accessibility, transparency, and quality of flood risk data and communication tools for all stakeholders. In addition to updating the mapping methodology to show property-level risk, FEMA should explore ways to expand the availability of anonymized flood loss and exposure data consistent with privacy and trade secret protections under federal law.”

3. Implement Risk-Based Pricing & Actual Costs: “A key to enabling the private market shift is to charge policyholders the actual costs of their policies. FEMA should continue to refine Risk Rating 2.0 implementation.  The Council recommends exploring existing subsidies and working with Congress to address affordability challenges for select homeowners.  FEMA can also evaluate opportunities to better align the Community Rating System Program eligible activities and discounts with measurable physical risk reduction actions communities and policyholders can take to ensure premium prices are reflective of property-level risk.”

4. Revise ‘Write Your Own’ Compensation: “FEMA provides an expense allowance to Write Your Own (WYO) private insurance companies of roughly $1 billion annually to sell, write, and service standard flood insurance policies under the National Flood Insurance Program. In FY25 the expense allowance was 29.1% of total written premium volume by company and projected at 28.4% for FY26. The compensation methodology is dated and doesn’t reflect improvements in FEMA’s systems, automated premium pricing methodology, or the expanded use of the direct-to-customer servicing platform.”

5. Shift to Private Market through Depopulation of Existing NFIP Policies: “A core component of the solution is a gradual, structured transition of certain existing NFIP policies to the private market in areas where private capacity exists and consistent with state regulatory frameworks.  This would be accomplished by pursuing a voluntary ‘take-out’ program, which would allow FEMA to assess the feasibility of transferring eligible policies to qualified private insurers under existing statutory authority.”

6. Evaluate Development of Flood Insurance Marketplace:  “To modernize and enhance the capacity of the national flood insurance system, it is recommended that FEMA evaluate the development of a flood insurance marketplace designed to provide consumers with access to both NFIP and qualified private insurance options when purchasing a new flood policy…The marketplace could encourage depopulation by requiring the insured to select a private flood insurance policy from a marketplace approved insurer that is priced at no more than 10 percent above the NFIP Risk Rating 2.0 actuarial rate for comparable coverage for the same property.”

7. Address Repetitive Loss Properties: “Manage repetitive loss properties through targeted mitigation planning and accountability measures, such as those proposed in the ‘Repeatedly Flooded Communities Preparation Act’ (S.1545).  This legislation provides a structured plan to address the highest-risk properties and ensures mitigation is a priority in these areas, thereby reducing the financial burden of repeated claims.”