44 Cfr 62.24

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Title 44: Emergency Management and Assistance
PART 62--SALE OF INSURANCE AND ADJUSTMENT OF CLAIMS
Sub~artC-Write-Your-Own (WYO) Companies
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5 62.24

WYO participation criteria.

New companies or organizations eligible for the pilot project we describe in paragraph (b) of this section
WHO a . a r r w n i w s w m b+&n b t b
W D program, must me& &&ds
For financial ca
repitAn8 and For csmrrth3nt to pxqfalrn obje~tives.
(a) To demonstrate the abiltty to meet the financial requirements, a private h w r a n w tampany w1sM1g

to mkx or r e e M r the W O pgm must:
(1) Be a licensed property insurance company;

(2) Have a fwe (5) year history of writing property insurance;
(3) Disclose any legal proceedings, suspensions, judgments, settlements, or agreements reached with
any State insurance department, State attorney general, State corporation commission, or the Federal
Government during the immediately prior five (5) years regarding the company's business practices;
(4) Submit its most recent National Association of Insurance Commissioners (NAIC) annual statement;

(5) Submit information, as data become available, to indicate that the company meets or exceeds NAIC
standards for risk-based capital and surplus; and
(6) Submit its last State or regional audit, which should contain no material negative findings.
(b) To demonstrate the ability to meet the financial requirements, a public e n t i risk-sharing
organization, an association of local governments, a State association of political subdivisions, a Statesponsored municipal league, and any other intergovernmental risk-sharing pool for covering public entity
structures, wishing to enter the WYO program, which will end September 30, 2004, must:
(1) Have authorii by a State to provide property coverage to its members;
(2) Have a five (5) year history of writing property coverage;

(3) Disclose any legal proceedings, suspensions, judgments, settlements, or agreements reached with
any State insurance department, State attorney general, State corporation commission, or the Federal
Government during the immediately prior five (5) years regarding the other insurer's business practices;
and

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Electronic Code of Federal Regulations:

(4) Submit its most recent two annual audits from an independent accounting firm performed in
compliance with generally accepted accounting principles that show no material negative findings; and
submit, as data become available, information to indicate that the other insurer meets or exceeds
standards comparable to those of the NAlC for risk-based capital and surplus.
(c) An applicant for entry or reentry in the WYO program must also pass a test to determine the
applicant's ability to process flood insurance and meet the Transaction Record Reporting and
Processing (TRRP) Plan requirements of the WYO Financial Control Plan. Unless the test requirement
is waived, e.g., where an already qualified performer will fulfill the applicant's reporting requirements, the
applicant must prepare and submit test output monthly tape(s) and monthly financial statements and
reconciliations for processing by the NFlP Bureau and Statistical Agent contractor. For test purposes, no
error tolerance will be allowed. If the applicant fails the initial test, a second test will be run, which the
applicant must pass to participate in the Program.
(d) To satisfy the requirement for commitment to Program goals, induding marketing of flood insurance
policies, the applicant will submit informatian concerning its plans for the WYO Program including plans
for the training and support of producers and staff, marketing plans and sales targets, and claims
handling and disaster response plans. Applicants must also identify those aspects of their planned flood
insurance operations to be performed by another organization, managing agent, another WYO
Company, a WYO vendor, a service bureau or related organization. Applicants will also name, in
addition to a Principal Coordinator, a corporate officer point of contact-an individual, e.g., at the level of
Senior Executive Vice President, who reports directly to the Chief Executive Officer or the Chief
Operating Officer. Each applicant shall furnish the latest available information regarding the number of
its fire, allied lines, farm-owners multiple peril, homeowners multiple peril, and commercial multiple peril
policies or coverage documents in force, by line. A private insurance company applying for participation
in the WYO program shall also furnish its Best's Financial Size Category for the purpose of setting
marketing goals.
[67 FR 13550, Mar. 22,20021

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