The Risk Rating 2.0 Flood Insurance Manual Has Arrived

On By Lauren Pachman, Counsel & Director of Regulatory Affairs

As anticipated, the Risk Rating 2.0 Flood Insurance Manual (FIM) was released on Sept. 1. An update to the existing FIM was released at the same time, as was a final version of the Industry Transition Memo (ITM). Here is what you need to know about each.

Industry Transition Memo

The ITM, linked above, explains how the transition from the legacy rating plan to Risk Rating 2.0 (RR 2.0) will work for National Flood Insurance Program (NFIP) policies with effective dates between Oct. 1, 2021, and March 31, 2022. It also provides guidance for NFIP agents, insurers, and vendors on how to accomplish that transition.

Flood Insurance Manuals

Two FIMs—one for each rating methodology—will be in effect simultaneously for the six-month period beginning Oct. 1, 2021 and ending March 31, 2022. As of April 1, 2022, only the Risk Rating 2.0 FIM, like the Risk Rating 2.0 methodology, will remain in effect.

FIM Effective April 1, 2021 (with October 2021 update)

This edition of the FIM should be used for rating new business policies with effective dates before Oct. 1, 2021. It should also be used for rating policies with effective dates between Oct. 1, 2021 and March 31, 2022 that are renewing using the legacy pricing methodology.

For policies renewing using the legacy rating plan with an effective date between Oct. 1, 2021 and March 31, 2022, this FIM should be used in conjunction with Attachment A of Bulletin W-21013 to make the required language substitutions, additions, and deletions.

This FIM should not be used for RR 2.0 rating; all policies issued using RR 2.0 must use the guidance found in the RR 2.0 FIM.

There are two ways to access the April 1, 2021 FIM:

Remember to consult Attachment A of Bulletin W-21013 for guidance on policies with effective dates between Oct. 1, 2021 and March 31, 2022.

Risk Rating 2.0 FIM, Effective October 1, 2021

This edition of the FIM provides guidance for administering NFIP policies using the new pricing methodology, known as Risk Rating 2.0. It should be used for rating new business policies with effective dates on or after Oct. 1, 2021. It should also be used for renewing policies with effective dates between Oct. 1, 2021 and March 31, 2022 that are transitioning to RR 2.0 at renewal. This version should not be used for rating using the legacy pricing methodology.

Here are links to the front matter and appendices for the RR 2.0 FIM:

We will continue to provide updates on the RR 2.0 transition process as they become available.

If you would like to share your experiences of the RR 2.0 transition process with PIA, please contact Lauren Pachman at Lpachman@pianational.org. We will be sharing members’ RR 2.0 experiences with FEMA in the weeks to come.