§ 4018. Operating costs and allowances; definitions

• (a) The Administrator shall from time to time negotiate with appropriate representatives of the insurance industry for the purpose of establishing—
  • (1) a current schedule of operating costs applicable both to risk-sharing insurance companies and other insurers and to insurance companies and other insurers, insurance agents and brokers, and insurance adjustment organizations participating on other than a risk-sharing basis, and
  • (2) a current schedule of operating allowances applicable to risk-sharing insurance companies and other insurers,
• (b) For purposes of subsection (a)—
  • (1) the term “operating costs” shall (without limiting such term) include—
    • (A) expense reimbursements covering the direct, actual, and necessary expenses incurred in connection with selling and servicing flood insurance coverage;
    • (B) reasonable compensation payable for selling and servicing flood insurance coverage, or commissions or service fees paid to producers;
    • (C) loss adjustment expenses; and
    • (D) other direct, actual, and necessary expenses which the Administrator finds are incurred in connection with selling or servicing flood insurance coverage; and
  • (2) the term “operating allowances” shall (without limiting such term) include amounts for profit and contingencies which the Administrator finds reasonable and necessary to carry out the purposes of this chapter.