Filed Under:Markets, Personal Lines

House, Senate Reject Efforts to Delay NFIP Rate Increases

Both the Senate and House last week rejected efforts to delay National Flood Insurance Program rate increases, making judicial action in federal district court in Gulfport, Miss. the last hope for those seeking to prevent the increases from taking effect in January.

Mississippi Insurance Commissioner Mike Chaney filed suit in October seeking an injunction against the rate increases until the Federal Emergency Management Agency completes an affordability study mandated under the 2012 Biggert-Waters Act.

The judge in the case has given FEMA until the end of today to file a reply to the friends of the court briefs supporting of the lawsuit by five Gulf Coast states.

Chaney said he hopes the court will rule by Dec. 30 or 31.

In a statement from the NAIC winter meeting in Washington, Chaney said, “The failure of the House and Senate to address the NFIP and FEMA problems supports our decision in Mississippi to file suit against FEMA concerning the bureaucratic  implementation of [Biggert-Waters], which was done without concern for consumers. We have been joined by five other states pursuing this case.”
FEMA Friday reiterated that the onset of the rate hikes and the affordability study were not linked. A FEMA official said Congress directed that the study of the law’s economic impact on property owners be conducted by the National Academy of Sciences, whose $1.5 million cost estimate and two-year time frame both exceeded the law’s allotments. However, FEMA is moving ahead to begin work on the study with the academies, a staff official said.

As for Congress, last Wednesday supporters of legislation that would delay the increases failed to get it through a floor motion to adopt S. 1610 by unanimous consent after Sen. Pat Roberts, R-Kansas, objected on the Senate floor.

S. 1610, the Homeowners Flood Insurance Affordability Act of 2013, would put off indefinitely reforms to the NFIP.

A last-minute effort by three Republican members of the House Friday to delay provisions of the Biggert-Waters Act failed to win enough support from Democrats.

The bill would have been pushed through the House under expedited procedures requiring a two-thirds vote, but was not brought up when Democrats balked. The bill was the same one added by Rep. Bill Cassidy, R-La., in June, to another piece of legislation then pending on the House floor.

“Time and again, I have made clear that I am committed to resolving the problems that have resulted from the implementation of the Biggert-Waters Act, and we have brought together a broad, bipartisan coalition of the House and Senate to do so,” said Rep. Maxine Waters, D-Calif., named sponsor of the 2012 bill.

“If the Cassidy legislation made real progress toward that goal, I would be the first to sign my name in support,” Waters said.

She said the Cassidy bill does nothing to help those already suffering from skyrocketing flood-insurance premiums.

R.J. Lehmann, senior fellow at conservative think tank R Street Institute, said the “unstated, but quite clear, goal of this convoluted process is simply to gut any reform until the NFIP's existing statutory authority would be scheduled to expire."

Lehmann urged that any tweaks to the law be considered through a thoughtful and deliberative process. 

“To the extent that there are legitimate concerns about affordability or how the Biggert-Waters reforms are implemented, those are best addressed through targeted, limited and means-tested programs considered through regular legislative order,” Lehmann said.

“Simply kicking the can down the road with delays, whether short-term or long-term, fails to grapple with the reality that the flood program is broke, that the benefits being phased out flow disproportionately to wealthy homeowners and that, against the backdrop of rising sea levels and increasingly costly catastrophes, we simply can no longer afford to encourage people to live in flood-prone areas,” he added.

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