Cap on annual premium increases

(a) Definition In this section, the term covered cost — (1) means— (A) the amount of an annual premium with respect to any policy for flood insurance under the National Flood Insurance Program; (B) any surcharge imposed with respect to a policy described in subparagraph (A) (other than a surcharge imposed under section 1304(b) of the National Flood Insurance Act of 1968 (42 U.S.C. 4011(b))), including a surcharge imposed under section 1308A(a) of that Act (42 U.S.C. 4015a(a)), as amended by this Act; and (C) a fee described in paragraph (1)(B)(iii) or (2) of section 1307(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4014(a)); and (2) does not include any cost associated with the purchase of insurance under section 1304(b) of the National Flood Insurance Act of 1968 (42 U.S.C. 4011(b)), as amended by this Act, including any surcharge that relates to insurance purchased under such section 1304(b). (b) Limitation on increases (1) Limitation (A) In general During the 5-year period beginning on the date of enactment of this Act, notwithstanding section 1308(e) of the National Flood Insurance Act of 1968 (42 U.S.C. 4015(e)), as amended by this Act, and subject to subparagraph (B), the Administrator may not, in any year, increase the amount of any covered cost by an amount that is more than 9 percent, as compared with the amount of the covered cost during the previous year, except where the increase in the covered cost relates to an exception under paragraph (1)(C)(iii) of such section 1308(e). (B) Decrease of amount of deductible or increase in amount of coverage In the case of a policyholder described in section 1308(e)(1)(C)(ii) of the National Flood Insurance Act of 1968 (42 U.S.C. 4015(e)(1)(C)(ii)), as amended by this Act, the Administrator shall establish a process by which the Administrator determines an increase in covered costs for the policyholder that is— (i) proportional to the relative change in risk based on the action taken by the policyholder; and (ii) in compliance with subparagraph (A). (2) New rating systems (A) Classification With respect to a property, the limitation under paragraph (1) shall remain in effect for each year until the covered costs with respect to the property reflect full actuarial rates, without regard to whether, at any time until the year in which those covered costs reflect full actuarial rates, the property is rated or classified under the Risk Rating 2.0 methodology (or any substantially similar methodology). (B) New policyholder If a property to which the limitation under paragraph (1) applies is sold before the covered costs for the property reflect full actuarial rates determined under the Risk Rating 2.0 methodology (or any substantially similar methodology), that limitation shall remain in effect for each year until the year in which those full actuarial rates take effect. (c) Rule of construction Nothing in subsection (b) may be construed as prohibiting the Administrator from reducing, in any year, the amount of any covered cost, as compared with the amount of the covered cost during the previous year. (d) Average historical loss year Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 4015) is amended by striking subsection (h) and inserting the following: (h) Rule of construction For purposes of this section, the calculation of an average historical loss year shall be computed in accordance with generally accepted actuarial principles.. (e) Disclosure with respect to the affordability standard Section 1308(j) of the National Flood Insurance Act of 1968 (42 U.S.C. 4015(j)) is amended, in the second sentence, by inserting and shall include in the report the number of those exceptions as of the date on which the Administrator submits the report and the location of each policyholder insured under those exceptions, organized by county and State after of the Senate.