Attacment A Statement of Work.pdf

Statement of Work for the Direct

Servicing Agent for the National Flood Insurance Program

A. Introduction

1. Background

The National Flood Insurance Program (NFIP) was created by Congress in 1968 and is administered by the Federal Emergency Management Agency (FEMA), specifically the

Mitigation Directorate. The purpose of the procurement is the selection of the NFIP

Direct Servicing Agent (DSA) for those policies of insurance written directly by the

Government. The Direct Servicing Agent shall have responsibility for the management, operation, maintenance and quality assurance for the activities and systems described herein as well as providing the support and professional services set forth in this

Statement of Work.

The NFIP provides flood insurance protection for property owners in return for local government commitment to sound flood plain management and related flood disaster mitigation efforts. The duties of FEMA, specifically the Mitigation Directorate, includes identifying communities with ―special flood hazard areas,‖ issuing maps for those areas, and helping communities meet flood plain management requirements. The regulations governing the NFIP are set forth in Title 44 of the Code of Federal Regulations (CFR), Chapter 1, Subchapter B, commencing at FAR Part 59.

Since 1983, the Write Your Own (WYO) Program has become the primary vehicle for the delivery and service of flood insurance with participating companies writing over 94 percent of NFIP policies in their own names. The Government bears the underwriting risk for these policies as well as for the remaining policies for which the Government is the named insurer, i.e., the ―Direct‖ business.

FEMA requires a Direct Servicing Agent to issue and service flood insurance policies, collect premiums, adjust and settle claims and, to disseminate information on insurance aspects of the Program to the public, lenders and agents. The Direct Servicing Agent provides day-to-day servicing of policies of flood insurance issued directly by FEMA pursuant to the NFIP.

2. Procurement Objectives

a. Maintain, in an uninterrupted manner and to program and contract standards, the day-to-day servicing of directly written standard flood insurance policies, Severe Repetitive

Loss (SRL) and Group [National] Flood Insurance Program (GFIP) Policies including underwriting, claims examination and payment, financial accounting, and reporting.

Attachment A

b. Help coordinate operations of the NFIP servicing facility with Bureau and Statistical

Agent (BSA) contractor, the NFIP Information Technology contractor and other insurance and government hazard mitigation and disaster response activities.

c. Operate as fiduciary agent for premium and other NFIP funds collection, and meet

Government deposit and other accounting requirements as well as other applicable requirements (such as those contained in the Plan to Maintain Financial Control for

Business Written under the Write Your Own Program), of the flood insurance program.

d. Meet regular information and report requirements including the statistical and other requirements contained in the WYO Transaction Record Reporting and Processing

(TRRP) Plan.

e. Provide information management systems that encompass cash management, policy administration, claims management, performance management reporting, and financial and statistical reporting.

Remainder of Page Intentionally Blank

B. Requirements

1. General Requirements

1.1 The NFIP Direct Servicing Agent (DSA), on behalf of the Government, will establish insurance servicing operations, which for most, but not all, purposes are like those of a

WYO company‘s flood insurance operations. It is expected that the DSA shall conform to

WYO statistical and financial reporting requirements; however, the Government through this contract, reserves the right to establish unique policies, operations, standards and reporting requirements. Examples include the servicing of the Severe Repetitive Loss

Policies (SRLP), Group Flood Insurance Policy (GFIP), federal debt collection procedures and the proscription against issuance of Mortgage Portfolio Protection (MPP).

The DSA shall for other than GFIP, conform to program changes, and schedules, as they are promulgated for the WYO companies, e.g., changes in policy forms, coverage and reporting.

1.2 In addition to requirements set forth elsewhere in this contract, the DSA shall establish such systems of management controls and reporting as may be necessary to assure full and complete compliance with NFIP statutes, the regulations at 44 CFR, parts

61-62, and FEMA directives and instructions.

1.3 Except as otherwise specified in this contract, the regulations at 44 CFR, Parts 61 and 62, the Flood Insurance (Agents) Manual, and the WYO Claims Manual, and the operating principles and requirements established for WYO company operations, e.g., the

[A] Plan to Maintain Financial Control for Business Written Under the Write Your Own

Program, the WYO Transaction Record Reporting and Processing (TRRP) Plan shall be applicable.

2.0 Transition Services

A six (6) month transition period will be provided. The transition period provides for systems testing, staffing, training and otherwise preparing for a seamless transition of services.

2.1 Weekly Reports, Meetings and/or Conference Calls

During the transition period, weekly progress reports shall be submitted by each

Wednesday of the following week. In addition, weekly progress review conference calls or meetings shall be held each Thursday with Mitigation‘s Contracting Officer‘s

Technical Representative (COTR), the Contracting Officer and the incumbent Contractor.

The reports, meetings and/or conference calls shall address progress, planned work, problems and corrective actions taken or required.

2.2 Transition Deliverables

The Contractor shall deliver the following related reports, procedures and plans necessary to effectuate a smooth and seamless transition of services:

__________________Transition Deliverables & Reports of Work_____________ __

ITEM NO. _ Description Due Date (*)______

01 Weekly Transition Progress Reports (2.1) Every Wednesday by

COB during Transition

_____________________________________________________Period_____________

02 Computer Security Plan (9.4.1) Within 30 days after effective date of

___________________________________________________ contract____________

03 Continuity of Operations Disaster Recovery Plan Within 30 days after

(9.4.3) effective date of

_____________________________________________________contract____________

04 Set of all system generated reports produced and Within 60 days after a complete set of all servicing procedures, e.g., effective date of claims, accounting, underwriting, records contract and every 6

___________management and information processing systems__ months thereafter____

05 Quality Assurance Plan Within 60 days after effective date of contract, and monthly

_____________________________________________________thereafter___________

(*) for the purpose of calculating transition deliverables, the due date is based on business days.

3.0 Policy Administration – Directly Written Business

Included in the servicing is the receipt, underwriting and processing of applications for insurance; receipt and deposit of premium revenues; production and delivery of policies;

processing and delivery of endorsements; cancellations and premium adjustments;

generation and delivery of renewal notices; receipt and deposit of renewal premiums;

calculation and delivery of agents‘ commissions and furnishing policy forms and other printed materials related to the insurance policy.

3.1 General Requirements

The Contractor shall conform the NFIP statutes, and regulations; Title 44 of the Code of

Federal Regulations, Parts 61 and 62; the Flood Manual (Agents); [A] Plan to Maintain

Financial Control for Business Written Under the Write Your Own (WYO) Program and

FEMA bulletins.

3.2. Specific Underwriting Requirements

The Contractor shall perform underwriting reviews of all new business applications to ensure eligibility and accuracy of underwriting information submitted. These reviews shall be in addition to the comprehensive tests and edits performed by the automated data system for all transactions. Specifically, underwriting reviews shall include all elevation rated policies, all condominium policies with particular attention to Association or Residential Condominium Building Association Policy (RCBAP) policies; all scheduled building policies; and policies in such areas where FEMA determines there is such a requirement, e.g., Coastal Barrier communities, or other areas or circumstances where there is sufficient suspicion of mis-rating of policies as to warrant review.

3.3 Group Flood Insurance Policy (GFIP)

3.3.1 The Group Flood Insurance Policy was introduced in 1995 to provide a low cost mechanism for insuring disaster aid receipts. The GFIP provides a minimum level of insurance coverage for three years, which is tied to the consumer price index. The coverage is adjusted annually in October to reflect the increased limits.

The Contractor shall be responsible for the servicing of the GFIP policies. Policy servicing for GFIPs shall include, but not be limited to: establishing and recording policyholder coverage dates; confirmation to states of individuals insured, certificate issuance, assisting policyholders with the NFIP mandatory purchase requirement by issuing letters with instructions of how to purchase a Standard Flood Insurance Policy;

notifying them when the GFIP will expire and Issuance of Termination Notice; in accordance with FEMA regulations and specifically the Terms and Conditions of the

GFIP Certificate of Flood Insurance. These letters will be available in English and in

Spanish.

3.3.2 The Contractor shall be responsible for the implementation and maintenance of all necessary GFIP policy administration guidelines, form letters, procedures, and information processing systems subject to FEMA approval.

3.3.3 The Contractor shall be responsible for the development of and/or conversion and adaption of the Government Furnished software, operation and maintenance of all data processing systems necessary for GFIP operations. All such systems shall satisfy all audit, financial control, security and privacy requirements of the Government and shall support oversight and audit requirements for effective conduct of the GFIP. The aforementioned systems shall also meet the information and reporting requirements, including the statistical and other requirements of the WYO Transaction Record

Reporting and Processing (TRRP) Plan, as modified to accept GFIP data.

3.3.3.1 The system shall have sufficient internal controls to track any policy written to the States‘ invoice, to the specific disaster declaration and to the actual production of the individual certificate and the group policy.

3.3.4 The Contractor shall coordinate with FEMA‘s Chief Financial Officer (CFO) in the receipt and reconciliation of electronic fund transfers for payment of GFIP premiums on behalf of the States. The Contractor shall coordinate and resolve any processing issues with FEMA‘s Disaster and Payment Support Branch.

3.4 Severe Repetitive Loss (SRL) Policies

3.4.1 The contractor shall service a defined group of Flood Insurance Policies called

Severe Repetitive Loss (SRL) policies/properties. In June of 2004, Congress passed the

Bunning-Bereuter-Blumenauer Flood insurance Reform Act of 2004 (FIRA 2004). That act contains provisions for the development of a pilot grant program for the mitigation of properties insured by the NFIP whose loss history with the NFIP meets the Congress‘ definition of an SRL property. The primary objective of the severe repetitive loss properties strategy is to eliminate or reduce the damage to property and the disruption to life caused by repeated flooding. There are approximately 8,000 insured properties meeting the SRL properties definition at any given month. Policies that renew on or after

January 1, 2007, and meet the criteria for severe repetitive loss will be transferred to the

NFIP Direct Servicing Agent for policy issuance.

3.4.2 The SRL group consists of any NFIP insured property that has met at least one of the following paid flood loss criteria since 1978, regardless of ownership:

Two, or more separate claim payments (building payments only) where the total of the payments exceeds the current value of the property.

In either case, two of the claim payments must have occurred within 10 years of each other. Multiple losses at the same location within 10 days of each other are counted as one loss, with the payment amounts added together.

The loss history includes all ownership of the property since 1978 or since the building‘s construction if built after 1978.

3.4.3 The Contractor must closely supervise the SRL group of policies from the time that they are identified as SRL by the NFIP Bureau & Statistical Agent (BSA) contractor.

3.4.3.1 The BSA will send electronic notice of an identified SRL property at least

150 days prior to the expiration of the policy. The notice is sent to the DSA and

Write Your Own (WYO) insurer simultaneously.

3.4.3.2 WYO companies will notify the affected policyholders, their agents and lenders 90 days before expiration of the policy. Additionally, WYO companies are required to send an additional data record through the TRRP cycle to the BSA containing the names and addresses of the agent of record, lender, and any other additional interest information. The BSA will forward the additional data record, along with the TRRP record to the DSA.

3.4.3.3 Upon receipt of the complete additional data record, along with the TRRP record the DSA will download the policy information and, sort the records by expiration date.

3.4.3.4 From the above records, the DSA will create a policy record, and will direct all related policy information to the DSA designated SRL Underwriter, who will re-underwrite, and rate the risk, to ensure that the premium charged is correct.

A. The SRL Underwriter will make direct contact with the agent of record, to gather the most current, and complete rating information, including the approximate replacement cost value of the subject property.

B. In addition, the SRL Underwriter will review the property loss history information for accuracy, using the best information available, provided by the agent, policyholder, and /or the Local Community Building

Permits/Land Use Office.

Upon completion of the verification of the loss history and replacement cost value

(A and B above), any identified changes will be sent to the BSA for updating the

SRL file.

3.4.4 Forty-five days prior to the expiration date of the validated SRL policy, the DSA will send special renewal bills (offers to renew), based upon the updated risk information, to affected policyholders, their agents, and lenders. These special renewal bills or offers will advise all parties that the property is ineligible for coverage outside the Special

Direct Facility.

3.4.5 SRLP (Severe Repetitive Loss Program) Designation Appeals

3.4.5.1 When a policyholder has documentation that the NFIP-insured property has not sustained the losses reported, a request for review may be presented, in writing, to the NFIP Bureau and Statistical Agent. All documentation to substantiate the review must be included with the request letter. If this documentation is received within 90 days or less of the policy expiration date, the policy will remain in the

DSA.

3.4.5.2. The BSA shall notify the policyholder and the WYO carrier of the resolution of the dispute of the SRL designation and shall, if appropriate, notify the DSA to flag the policy‘s data records for transfer back to the WYO Company at the next renewal anniversary date for servicing.

3.4.5.3 The policyholder and agent will be notified of the results of the review. If the policyholder‘s request for review is successful, the DSA policy will be canceled and the full premium will be returned. The policyholders company of choice will write the policy using the DSA‘s effective dates. However, if a loss occurs both in the current term and before the policy can be re-written, the DSA will continue to service the claim and will release the policy at the next renewal cycle, unless the new claim qualifies the property for the DSA.

3.4.6 Mitigation Appeals

3.4.6.1 Outside of the request for review process, when mitigation efforts (other than buyout or demolition) such as elevation, relocation, or other approved mitigation efforts are approved by FEMA, the property will be removed from the

DSA at the next renewal.

3.4.6.2 If the property is bought out or demolished under an approved FEMA mitigation project, and the efforts for the specific property are FEMA approved, the policy will be canceled and the pro-rate premium (less Federal Policy Fee and, if applicable, Probation Surcharge) will be refunded. When a property is bought out or demolished, any commission chargeback to the agent will be forgiven.

3.4.7 Historical File

3.4.7.1 There is currently a Historical Repetitive Loss Target Group (RLTG) and a Severe Repetitive Loss (SRL) file that contains all properties once identified as

RLTG/SRL but that no longer qualify and can once again be written by the

WYOs. SRL properties no longer considered SRL should also migrate to the

Historical file. This file is provided to all companies every month.

3.4.7.2 All SRL related documents shall be controlled from time of receipt and shall be retrievable by prior WYO Company policy number, new NFIP policy number and by the Bureau and Statistical Agent assigned repetitive loss (property locator) number.

3.4.7.3 The Contractor shall provide secured access to these policy records, including but not limited to, all underwriting data, elevation certificates, SRL designation, and policy and claim related records to the Bureau and Statistical

Agent who in turn will control access to the FEMA, the Regions and States for the purpose of monitoring and promoting the mitigation of these SRL properties.

3.4.8 Additional Considerations

3.4.8.1 In January 2008, FEMA implemented the Severe Repetitive Loss Pilot

Grant Program as directed, by way of the Flood Insurance Reform Act of 2004

(FIRA 2004). The pilot grant program includes a strategy to reduce flood claims for the approximately 8,000 properties which make up the Severe Repetitive Loss group as is identified in section 3.4 above.

3.4.8.2 SRL mitigation grants are provided to eligible Applicant

States/Tribes/Territories that, in turn provide sub-grants to local governments or communities. The applicant must have a FEMA approved mitigation program in place that includes SRL properties. Following a consultation process with SRL property owners to determine the appropriate mitigation activity, the local participating community (sub-applicant) will advise property owners of their inclusion in an SRL grant application.

3.4.8.3 Property owners have 45 days in which to respond to an offer of mitigation. If the property owner accepts the mitigation offer, then the DSA will continue normal policy processing until completion of the mitigation activities, nonrenewal, or cancellation of the policy.

3.4.8.5 SRL property owners who refuse a mitigation grant offer will be subject to a 50 percent increase in their flood insurance premium. FEMA Headquarters

Grants Implementation Branch will notify the DSA of an SRL property/policy owner declining a grants mitigation offer.

3.4.8.6 The DSA will generate a ―Premium Increase Letter‖ within 90 days of receipt of advice from FEMA‘s HQ Grants Implementation Branch of a policyholder/property owner‘s refusal to mitigate. The letter will explain that the premium increase due to refusal to mitigate will become effective at the policy‘s next renewal.

3.4.8.7 Policyholders have the right to appeal the premium increase. The property owner must submit a written appeal, including supporting documentation, within

90 days of the notice of Premium Increase Letter. The applicable increased insurance premium rate increase for the property will be suspended during a stay of applicability pending the outcome of the appeal.

3.4.8.8 The DSA must record and track insurance premium appeals through to their resolution.

A. If the property owner loses the appeal, the increase in the chargeable risk premium rate for flood insurance coverage on the property will be effective on the first renewal or issuance of a new NFIP policy covering the structure after the appeal is closed. In addition, any insurance premium rate increase suspended during the stay of applicability shall be collected from the property owner. If FEMA through its DSA contractor does not receive the additional premium by the date it is due, the amount of coverage will be reduced to correspond to the amount of premium payment received. The DSA will send a letter notifying the policyholder and other interested parties that the policy has been renewed with reduced limits of coverage. With every additional claim payment made against the

NFIP policy in excess of $1,500 in total claim payments, the DSA will generate notice of increase in chargeable premium rate for that property.

The DSA will produce renewal billing with an additional premium rate increase of 50 percent over the chargeable rate, as adjusted by any other premium adjustments otherwise applicable to the property. The increases shall end when the actuarial rate is reached.

1. If the Mitigation Offer is refused, the Notice of NFIP Insurance

Premium Rate Increase will be accompanied by a detailed, side-by-side comparison of the total premium at the time the offer was made and the projected total premium as a result of increased insurance premium rate.

3.4.8.9 The Contractor shall receive, review and coordinate the resolution of SRL designation appeals with the Mitigation Division and the policyholder through

Mitigation approved notification letters and procedures.

3.4.8.10 The Contractor, in accordance with the procedure outlined in Section 8 of the FY 2007 SRL Pilot Program Guidance, shall implement and monitor any notice of impending rate increase due to a refusal to accept an offer of mitigation or purchase or due to a subsequent claim, as provided for in the 2004 FIRA.

3.5 Underwriting Forms and Supplies

The Contractor shall be responsible for ordering or stocking and furnishing to agents, those forms and other printed supplies used in connection with policy processing. These shall be made available electronically and in paper format.

4.0 Claims Administration

4.1 The Contractor shall provide servicing to include the proper disposition of claims, including but not limited to: clerical, record keeping, examination, re-inspection, and payment approval on behalf of FEMA, as set forth below and in the Claims Manual.

4.2 General Claims Requirements

4.2.1 The Contractor shall, unless otherwise required by law or regulation, adhere to the NFIP practices and procedures concerning claims adjustment, approval and payment as may be set forth in the NFIP regulations at Title 44, CFR, Part 62; all

Standard Flood Insurance Policy Forms; the Claims Manual; Integrated Flood

Insurance Office (IFICO); Adjuster Control Office (ACO); Claims Bulletins; [A]

Plan to Maintain Financial Control for Business Written Under the Write Your

Own program and interpretations of the Federal Insurance Administrator.

4.2.2 Further, the Contractor shall be responsible for coordinating, as directed, claims activities with the NFIP Bureau and Statistical Agent Contractor, Write Your

Own companies, Windpools, and Beach Plans, as appropriate, and with other

Government programs, e.g.., FEMA Individual Assistance Programs, Small Business

Administration Loan Programs, as well as for providing information, database access and other support, as required.

4.3 Unique Servicing Agent Claim Requirements

4.3.1 The Contractor shall make prompt payment of the fees and expenses of the adjusting companies, insofar as they conform to Government established fee schedules. All such payments shall be made from the FEMA provided Letter of

Credit (LOC).

4.3.2 Notwithstanding the requirements set forth elsewhere in this contract; the

Contractor shall furnished FEMA with on-line access to all open and closed claims data files, including all status and payment data.

4.3.3 Any funds received by the Contractor as a result of salvage or subrogation rights, or collection shall be separately accounted for and deposited in the depository account within 24 hours of receipt.

4.3.4 The Contractor shall operate Government approved programs of re-examination/re-inspection of pending and closed claims performed independently or in conjunction with NFIP Bureau and Statistical Agent Contractor, on-site audit, adjuster education; etc.

A. The Contractor, independently or in coordination with the Bureau and

Statistical Agent Contractor, shall re-inspect, to the maximum extent practicable, prior to closing specific claims in keeping with the requirements of the [A] Plan to Maintain Financial Control for

Business Written under the Write Your Own program.

4.3.5 The Contractor shall, upon direction of the Contracting Officers Technical

Representative (COTR), establish, manage, and operate an Adjuster Coordinating

Office (ACO) and/or Integrated Flood Insurance Claims Office (IFICO) (see

Section 5.0, following) at disaster sites and cooperate with the Bureau and

Statistical Agent contractor operated Flood Response and Claims Coordinating

Offices, established independent of, or with the IFICO. The Contractor shall ensure adequate adjuster back-up with any given area particularly areas in case of multi-site, multi-disaster conditions. Further, the Contractor shall otherwise promote and assist the efficient adjustment and settlement of wind-water losses.

It should be recognized that operation of the automated claims system at remote sites in support of adjuster assignment and claims payment functions, is considered to be key element in any flood disaster response.

4.3.6 The Contractor shall participate and cooperate in developing and implementing any necessary procedures for single adjuster handling of flood/wind storm damage.

4.4 Claim Forms and Supplies

The Contractor shall be responsible for ordering or stocking and furnishing to adjusters, and others, those forms and other printed supplies used in connection with claims processing. These shall be made available electronically and in paper format.

5.0 Adjuster Coordination Office (ACO) and Integrated Flood Insurance Claims

Office (IFICO) Requirements.

5.1 The Contractor shall maintain, at all times, the capability, through its own and/or subcontractor resources, to assemble and deploy, within 24 hours of notice by the

Contracting Officers Technical Representatives (COTR), no fewer than three (3) disaster teams each prepared to establish an ACO or an IFICO and begin operations, potentially including on-site claims payment, or a selected subset of IFICO operations in the flooded areas. The Contractor shall also maintain the capability to field, within seven (7) calendar days of notice, additional back-up team(s) to conduct full or partial IFICO operations in the event of four (4) or more geographically distant but simultaneous flood disasters.

5.2 In the event of a flood disaster, and as soon as practicable, the Contractor‘s Claims

Director shall, assess the claims exposure by identifying the potential number of policies affected by the flooding. The Contractor shall provide this assessment and other relevant information to the Contracting Officers Technical Representative (COTR) and Bureau and Statistical Agent and shall take the measures enumerated in 5.2.1 through 5.2.7 as warranted by conditions and as directed by the COTR.

5.2.1 Cooperate with the ―Claims Coordinating Office‖ or the ―Flood Response

Office‖ established by the Bureau and Statistical Agent Contractor.

5.2.2 Deploy a disaster team to the flood area.

5.2.3 Request immediate assistance from adjustment organizations.

5.2.4 Generate selected listings/maps of policy records on properties in the flooded area.

5.2.5 Establish an on-site emergency supply center for distribution of forms, brochures, and other information to expedite claims processing and assist policyholders in filing claims.

5.2.6 Maintain records of adjuster assignments, by tax identification number or a flood certification number, and adjuster name and adjusting firm.

5.2.7 Establish an ACO or IFICO to provide local presence, contact agents, control claims management, and facilitate prompt loss assignments and claims settlement.

5.3 In the event the policies in force do not warrant the opening of an IFICO, the

Contractor shall operate at the Contractor‘s site an ―In-House IFICO‖, which may be coordinated with operation of an in-field ACO. The In-House IFICO shall be established under an IFICO ―number‖ to aggregate information, track, track loss assignments, examine files, operate claims diaries, monitor adjuster closure rates, direct re-inspections, and effectively manage loss adjustment practices and procedures. As appropriate, a dedicated claims examination unit, including supervisor(s), shall process all of the losses of a designated In-House IFICO.

6.0 Customer Service and Agent Support

6.1 Written Inquiries to the Program

6.1.1 The Contractor shall receive and respond to all incoming facsimiles, electronic mail of regular mail as follows:

A. Simple status inquiries within five (5) business days;

B. Complex inquiries within 10 business days. Complex inquiries typically involve research of policy transactions and/or complex claims or underwriting issues;

C. All ―VIP‖ inquiries; Congressional, White House, and FEMA correspondence within three (3) business days of receipt by the Contractor.

6.2 Telephone Inquiries to the Program

6.2.1 The Contractor shall respond to NFIP calls from their agents, insureds, lenders and adjusters through the establishment and operation of a national toll-free

Customer Service Center. This service shall be provided from 8:00 a.m. to 8:00 p.m. Monday through Friday, Eastern Standard Time/Eastern Daylight Savings

Time.

6.2.2 The Contractor shall work with FEMA personnel to ensure that adequate trunking is configured for the FEMA supplied PBX/ACD. Adequate trunking is defined as for the busiest hour of the day, not more than five (5) calls out of each 100 calls presented to the

PBX/ACD will receive a busy signal at the PBX/ACD. The Contractor shall also work with FEMA personnel to assure that overall trunk, network, and service capacity are adequate to ensure desired service levels to customers are maintained.

6.2.3 The Contractor shall manage staffing so as to minimize caller wait in queue.

Based on anticipated call volumes (see Appendix IV – Workloads for call volume statistics), the Contractor shall staff the contract so that; 1) 98 percent of callers sent to the queue shall be answered by a staff member within 60 seconds; and 2) the average wait time in queue shall not exceed 30 seconds. This level of service shall be provided at all times of the day, including periods with the highest call volumes, and lunch and dinner periods.

6.2.4 The Contractor shall endeavor to minimize call duration. For planning purposes, the anticipated average duration of 90 percent of incoming calls is expected to be three (3) minutes or less. The average duration of the remaining 10 percent of calls is expected to be less than five (5) minutes.

6.2.6 The Contractor shall staff and operate Telephone Device for the Deaf (TDD) equipment and dedicated lines to serve hearing and speech impaired callers. The

Contractor shall also access, as required, translator services to assist non-English and non-Spanish speaking callers.

6.2.7 The Contractor shall perform follow-up activities by telephone and/or written in order to fully respond to inquiries.

6.3 Agent Rating Support

The Contractor shall provide web-based rating support to agents and brokers to facilitate policy sales and to provide expert service to the NFIP Direct Agents.

6.4 Maps and Flood Manual (Agents) Orders

6.4.1 The Contractor shall forward to the FEMA Map Service Center all misdirected requests and order forms received by the Direct Servicing Agent.

6.4.2 The Contractor shall refer all telephone inquiries for Manuals and form requests to the FEMA Distribution Center.

7.0 Financial Management and Reporting

7.1 Premium Remittance

The Contractor shall receive and account for premium remittances to the National Flood

Insurance Program (NFIP), including credit card and lockbox-processed renewal remittances. Premium remittances shall be accounted for separately from remittances for claims salvage, claims collection, subrogation, etc.

7.1.2 The Contractor shall deposit, at a Government designated depository within 24 hours of receipt, all remittances received. Adequate safeguard measures shall be employed while funds are in custody of the Contractor. Deduction from remittances shall not be made for any purpose. The Contractor shall handle or hold all such funds in a fiduciary capacity. The Contractor shall be authorized to affix the ―for deposit only‖ endorsement on remittances deposited in the depository bank.

7.1.3 Brokers, agents, etc., shall be required to transmit to the Contractor the full amount of all premiums collected for insurance.

7.1.4 Unpaid or uncollected checks shall be handled through procedures detailed in Section 7.6, Debt Collection, of this Statement of Work.

7.2 Premium Refunds

The Contractor shall issue refunds to the appropriate party of record on the policy file for overpayments or refunds resulting from cancellations or rating endorsements. The funds shall be paid for by the Government provided Letter of Credit (LOC) and shall be mailed within seven (7) business days of complete processing.

7.3 Sales Commissions and Annual 1099 Reporting

7.3.1 FEMA shall determine and notify the Contractor of the rate of commissions to be paid to insurance agents and brokers. The commissions to agent and brokers shall be calculated, adjusted, accounted for, and controlled (based on the taxpayer identification number on the application) on a daily basis as the premium payments and refunds are made. The commission transactions for each agent or broker shall be accumulated on a monthly basis. By the 10 th calendar day of the following month, payment of commissions shall be paid to agents and brokers.

7.3.2 IRS 1099 forms shall be prepared on an annual basis reporting agents‘, attorneys‘ or brokers‘ earnings for the year, in accordance with Internal Revenue

Service Regulations. (Note: the aforementioned forms shall also be prepared for claims adjuster, engineer and Certified Public Accountant earnings.)

7.4 Financial Control and Reporting

7.4.1 The Contractor shall be responsible for the operation of a comprehensive financial control system for the NFIP business and, at a minimum, for conforming to the [A] Plan to Maintain Financial Control Plan for Business Written Under the

Write Your Own Program, the WYO Accounting Procedures Manual, the Chief

Financial Officers Act of 1990, U.S. General Accounting Organizations, Programs, Activities, and Functions, and the preparation of necessary financial reports, statements, etc. The system is to provide effective cash management, security and control for all Federal funds.

7.4.2 The Contractor shall produce and maintain readily available for research and audit purposes, in the most appropriate media, e.g., paper, magnetic tape, disk, or microform, back-up copies of all financial data and reports when they are no longer accessible, online in the NFIP Computer System.

7.4.3 Provide adequate physical security and internal controls to safeguard Federal funds and provide accurate, reliable financial data. All receipts shall be processed within secure, controlled access areas. Similarly, all blank check stock and credit card related equipment and forms shall be completely secure and full records of access and use shall be maintained.

7.4.4 The Contractor shall prepare Schedule 9, Accounts Receivable Statements, on a fiscal year quarterly basis. The quarterly reports are due within 21 calendar days after the close of the quarter.

7.4.5 At the end of the fiscal year financial statements, the Schedule 9, Accounts

Receivable Statement, shall be due to FEMA no later 21 calendar days after the close of the fiscal year, along with all the back-up and supporting schedules for all the items on the monthly financial reports.

7.5 Support for Audits, Operation Reviews and Contract Surveillance

The Contractor shall provide space (for up to four (4) personnel) and other needed support and shall cooperate with independent auditors engaged by FEMA for conduct of annual financial audits, and with FEMA‘s staff conducting operational underwriting and claims reviews and the periodic surveillance of the Direct Servicing Agent contract.

7.6 Debt Collection Requirements

7.6.1 Background: The Debt Collection Act of 1982 (31 U.S.C. 3701 et seq.)

requires the Federal government to aggressively collect debts due the United

States Government, including those owed the NFIP. The Direct Side Contractor shall be required to reimburse the NFIP directly for all claims over payments, premium refunds returned to policy holder by mistake, any erroneous adjuster payments or agent commissions and any other scenarios where government/program funds have been disbursed by contractor and are required to be reimbursed to the NFIP/government.

Unpaid checks that remain outstanding for six (6) months should be voided and the funds must be returned to the NFIP with the Department of Treasury.

8.0 Performance Management and Reporting

8.1 While the Contractor is obligated to perform all work as outlined in the Statement of

Work, it is considered necessary to apply performance standards to selected operations and processes. The performance standards are considered one measure of whether the

Contractor is performing satisfactorily. These standards are shown in the sections below.

8.2 The Contractor shall submit a computerized performance report for each of the elements of work enumerated in 8.2.1 through 8.2.5 each month. The performance report shall be submitted to the Contracting Officers Technical Representative (COTR) for work and standards enumerated below along with the submission of the invoice and shall be subject to review and verification. Note: Below refers to business days

8.2.1 Application Processing – 7 days

Note: If the policy cannot be mailed due to insufficient or erroneous information or insufficient funds, a request for correction (and/or added money) or a

"tentatively rated" policy shall be mailed within seven (7) days.

8.2.2 Renewal Processing – 3 days

Note: If the renewal cannot be mailed due to insufficient or erroneous information or insufficient funds, a request for correction (and/or added money) or a tentatively rated policy shall be mailed within three (3) days.

8.2.3 Endorsement Processing - 3 days

Note: If the endorsement cannot be mailed due to insufficient or erroneous information or insufficient funds, a request for correction (and/or added money) or a tentatively rated policy shall be mailed within three (3) days.

8.2.4 Cancellation and Refund Processing – 10 days

Note: If the cancellation cannot be processed due to insufficient information, a request for the needed information and/or signature will be sent within 10 days of receipt of the cancellation.

8.2.5 Group Flood Insurance Policies and Certificates of Insurance – 7 days

Note: If the policy cannot be mailed due to insufficient or erroneous information or insufficient funds, a request for correction (and/or added money) shall be mailed within seven (7) days.

8.2.6 Claims Adjustment, Examination and Payment - 45 days, average, from receipt of Notice of Loss (or equivalent) through completion of the adjustment process, except as documented, on a case by case basis, to be possible – seven (7) business days from receipt of final Proof of Loss through completion of examination and mail out of claims draft or check. Note: If, upon completion of the examination process, the claim cannot be paid due to insufficient or erroneous information, a request for correction shall be mailed within five (5) business days.

Such open claims shall be on diary, included in the calculation of average elapsed time for adjustment/examination and payment. Claims payments delayed due to

ICC determination, litigation or as a result of an investigation or request of the

FEMA Office of the Inspector General shall not be subject to this standard.

8.2.7 Correspondence, Simple and/or Status Inquiries – 5 days.

8.2.8 Correspondence, Complex Inquiries – 10 days.

8.2.9 Congressional, White House or Other ―VIP‖ Correspondence Received

Directly – three (3) days to acknowledge receipt (with copy to the COTR) and to furnish relevant documents, files and related materials to the COTR for completion of reply.

8.2.10 Deposit of Premiums and Other Receipts – 24 hours of receipt.

9.0 Information Management System

9.1 General

9.1.1 The Contractor shall operate all computer and telecommunications hardware and software system(s) necessary to fully support the applications and requirements defined in this Statement of Work. The requirements of this paragraph apply to all systems which, are or may be, utilized by the Contractor in carrying out its obligations under this contract in connection with Direct business policy writing and servicing, e.g., billing, claims, accounting, reporting etc., ACO and/or IFICO support and other Government requirements. This paragraph applies to all information technology equipment utilized including ―mainframe‖, special purpose systems, data entry systems, ―personal computers‖, ―micro‖ and

―mini‖ systems and all associated accessories, peripherals and communities systems.

9.1.2 All information technology equipment and systems provided by the

Contractor in support of the contract requirements shall satisfy all audit, financial control, security and privacy requirements of the Government.

9.1.3 The Contractor shall prepare and deliver to the Contracting Officer a ―Hold

Harmless‖ against infringement claims against the Government in connection with all, other than Government furnished software used by the Contractor in performance of this contract. The Contractor shall be responsible for the appropriate safeguarding and utilization of all third-party proprietary software systems acquired by lease for use in the operation of this contract. The Contractor shall be responsible for securing all necessary releases to permit use of third-party software in the performance of and disaster recovery tests.

9.1.4 The Contractor shall establish and maintain the capability for high-speed file transfer, data compression facility and on-line interface. The Contractor shall maintain the ability to exchange information electronically across disparate systems.

9.1.5 To permit FEMA online access to Program data, the Contractor shall operate Government Furnished Equipment (GFE) which shall include a high speed connection to the FEMA Wide Area Network. This capability will be maintained in conformance with all Agency security practices as defined by the

FEMA Enterprise Security Manager (ESM). GFE associated with the connection to the FEMA WAN and FEMA computers systems will be subject to FEMA security and operations monitoring to insure operational integrity and compliance with security directives. Individual Components of the GFE related to this capability may include the following:

A. Secure network dial-in access capability for not less than five (5) concurrent users to the Contractor maintained systems

B. Data router configured to Agency specifications;

C. Terminals and Personal computers configured to Agency specifications;

D. Network firewall devices maintained by Agency system managers.

9.2 System Availability and Response Time

9.2.1 The Contractor shall maintain online inquiry capability, on-site, and at all remote or back-up locations, as applicable, to the following levels for any given month. There shall be at least 98.5 percent prime time (7 a.m. to 8 p.m.) EST/EDST, Monday-Friday) availability; at least 98.0 non-prime time availability; four (4) or fewer system interruptions of less than one hour in duration in any given month; one

(1) or no extended (greater than one hour in duration) interruption in any given month; no interruption greater than six (6) hours in duration in any given month.

When there is disaster activity in the field, the system may be required to be available

24 hours a day and on weekends. The system shall have an availability of 99 percent or more during these specified times. (online response time averaging greater than 4.0 seconds (for any given hour) shall be considered equivalent to non-availability; see

9.2.2, following.)

9.2.2 The system shall provide a response time of four (4) seconds or less. This performance requirement shall be required for both response update and inquiry functions, at all locations, including FEMA Headquarters and disaster field operations.

The system shall also meet the availability standards stated in 9.2.1.

9.3 Adjuster Coordinating Office (ACO) and Integrated Flood Insurance Claims Office

(IFICO) support

9.3.1 Notwithstanding any of the other requirements set forth elsewhere in this

Statement of Work, the Contractor shall at all times maintain ready for rapid deployment and use in the event of flood disaster no fewer than six (6) telephone telecommunication, teleprocessing ―kits‖ required for IFICO operations. The aforementioned kits may also be dispatched to an ACO. The Contractor shall also assure availability of needed modems, ―ports‖ and other facilities to allow for the needed remote inquiry and processing capabilities for no fewer than six (6) simultaneous sites. Upon contractor request, Government Furnished Property can be supplied for the ACO and IFICO.

9.4 Security, Continuity of Operations, Disaster Recovery

9.4.1 Within 30 days of the award of this contract, the Contractor shall develop a

Computer System Security Plan, which shall, at a minimum include the controls required by the Computer Security Act, OMB Circulars A123, and A130. The plan shall address, at a minimum, contingency and disaster recovery, personnel and physical security, computer security awareness and training, and security management and coordination. The security controls required by the Security Plan shall not be compromised during either the occupant or return moves from the disaster recovery facility.

9.4.2 Within 30 days of the award of this contract, the Contractor shall develop a continuity of Operations-Disaster Recovery Plan. Initial test of the plan shall be completed within 90 days following contract award. The plan shall be subsequently tested at a minimum of once annually. The Disaster Recovery Plan must enable the downed system to be available in three (3) days or less. The entire system shall be able to be operated from the disaster recovery site for an extended period of several months.

9.4.3 Every six (6) months the Contractor shall deliver to the Contracting

Officers Technical Representative (COTR) a complete set of all system generated reports produced and a complete, up to date set of all procedures used in the conduct of the contract.

9.5 The Contractor shall be responsible for providing all hardware and software systems, excluding those identified in Section 9.1.5, as well as providing all necessary services and supplies to ensure their efficient operation.

9.6 The Contractor shall develop and maintain a comprehensive, high-level overview of the systems used to support the Direct Servicing Agent business processes. It should include a description of the NFIP Direct Operational Environment, briefly describing the various user departments‘ functions; the NFIP Direct Computing Environment, with a high-level view of the NFIP Direct hardware platforms; and a description and pictorial representation of the architecture of the NFIP Direct systems, which provides a view of the application systems developed to support the NFIP Direct functions.

10.0 Additional Requirements

10.1 Forms and Printing Requirements

10.1.1 In connection with the ongoing servicing of policies and support to producers, the

Contractor shall be responsible, in cooperation with the NFIP Bureau and Statistical

Agent, for developing and maintaining program forms, including the Standard Flood

Insurance Policy (SFIP) and data collection instruments, e.g., the NFIP Application form.

This shall be done in coordination with FEMA‘s Printing Officer, Forms Management

Officer and Information Collections Management Officer and consistent with their guidance.

10.1.2 The Contractor shall operate an inventory management system for ensuring adequate inventories and for tracking all aspects of print production, including but not limited to: design, graphics, printing and obtaining as necessary reviews, clearances and signatory approval from the Contracting Officers Technical Representative

(COTR) for printing.

10.2 Postage, Freight, Delivery, Storage and Shipping Requirements

10.2.1 The Contractor shall establish and maintain a system for the management control of (including cost control), security and accounting for all postage, express and storage expenses. The Contractor shall report on a monthly basis the nature of postal and express expenditures, any major/and or unusual expenses, and measures being taken and progress being made to reduce costs, e.g., by changing mailing frequencies, reducing weights or classes of mail, etc.

10.2.2 The Contractor shall be responsible for incidental storage of materials furnished by the Government and for shipping such material on its own initiative or upon request of the Contracting Officers Technical Representative (COTR).

The Contractor shall establish and maintain a system for the management and control (including cost control) and accounting for all storage and shipping expenses.

10.2.3 Postage, private express and storage costs will be…