The National Association of Mutual Insurance Companies is askingthe Senate to resist calls to delay or rescind scheduled floodinsurance rate increases, arguing that the rates must adequatelyreflect the risks.

The NAMIC letter was sent to the Senate legislative leadershipWednesday apparently out of concern that some members of the Senatewould try to insert such language in legislation yesterday thatraised the debt ceiling and ended the federal-governmentshutdown.

While the bill did include several provisions not directlyrelated to the two critical issues, provisions touching on theflood insurance rate hikes, which are part of National FloodInsurance Program reforms passed in 2012, were not included.

However, altering the rate hikes has attracted strong support inthe Senate. For example, 24 senators signed on to a letter lastweek asking Congress to delay the increases pending completion ofaffordability studies and appeals of new flood maps that are beingused to determine individual increases or decreases levied by theNFIP.

And Sen. Charles Schumer, D-N.Y., a member of the SenateDemocratic leadership, has told his constituents that he would seekchanges to the mandated rate hikes after the debt/shutdown criseswere resolved.

In NAMIC's letter, signed by Jimi Grande, NAMIC senior vicepresident, federal and political affairs, the association says,"The NFIP must charge rates that reflect the true cost of providingflood-insurance coverage, and the government should not continue tomask the risks of living in a flood-prone area by delaying thesemuch-needed reforms."

Grande says in the letter that prior to the passage of thereform legislation, the Biggert-Waters Act of 2012, the NFIP's"unsustainable rates all but ensured the program would remain indebt to the Treasury and would be incapable of meeting itsobligations to policyholders after a major flood."

Grande adds that NAMIC recognizes the need in some cases forassistance, which could be provided through direct assistancerather than by weakening the NFIP through suppressedflood-insurance rates. He also emphasized the need to addressnatural catastrophes like flooding in a proactive manner,highlighting the need for better mitigation practices by both thepublic and private sectors.

"NAMIC continues to support providing assistance on ameans-tested basis for those who truly cannot afford the increasedrates, and we are also actively engaged in efforts to reduce thethreat of flooding by promoting and incentivizing pre-disastermitigation," Grande says in the letter.

"However, we remain in full support of reforms to the NFIP madeby the Biggert-Waters Act and oppose any efforts to delay orrollback pieces of the legislation," Grande said.

Currently, roll-back efforts are on three tracks: there is thestrong support in the Senate for legislation delaying the ratehikes; there is pending legislation passed by the full House andthe Senate Appropriations Committee that would delay at least forone year some of the rate hikes; and there is a lawsuit filed inFederal District Court in Gulfport, Miss., that seeks an injunctionbarring the rate hikes pending completion of certain studies.

The suit was filed by the Mississippi insurance commissioner inearly October. A hearing on the issue is scheduled for Oct. 28.Currently, Florida and Louisiana have indicated that they wouldfile friend of the court briefs supporting the lawsuit.