The National Conference of Insurance Legislators added its voice to the growing chorus urging a delay of planned National Flood Insurance Program rate increases, while lobbyists with knowledge of the NFIP say Senate action on such a delay could come by the end of the year.

NCOIL passed a resolution at its annual meeting this past weekend stating that the Biggert-Waters Act “substantially and immediately devalued the investments made in all properties endowed with flood damage mitigation measures, as well as properties receiving subsidize rates.”

The resolution predicts that consumer confidence and the nation's economy, including the banking and mortgage industries, will suffer—and says that “a violent rise” in premium costs may lead to financial distress for residents and property owners around the nation.

The resolution also urges Congress and FEMA to actively and expeditiously explore the use of private reinsurance to protect against catastrophic loss.

Meanwhile, the Senate is setting the stage for prompt legislative action on the issue. According to industry lobbyists intimately involved in the National Flood Insurance Program, Senate staffers will be spending the current Thanksgiving recess “whittling down” proposed amendments to the National Defense Reauthorization Act (NDAA), S. 1867.

The lobbyist said that, “there is no guarantee” that the Homeowner Flood Insurance Affordability Act, S. 1610, will be on the list cleared for floor action, but it has “broad bipartisan support.”

If the flood bill—sponsored by Sen. Mary Landrieu, D-La., and Sen. Robert Menendez, D-N.J.—clears various hurdles and passes the Senate through the NDAA in some form, it will go directly to conference and therefore bypass the need for action by the House Financial Services Committee, where there is significant opposition to disrupting the path to actuarial rates imposed by the Biggert-Waters Act, the lobbyist said.

Under the Landrieu/Menendez bill, most of the rate increases imposed by Biggert-Waters would be delayed for up to four years. Only provisions imposing actuarial rates on businesses and second homes would be retained under S. 1610.

One industry lobbyist who is closely tracking the issue says “the Landrieu/Menendez bill has strong bi-partisan support and the support of the majority leader,” Sen. Harry Reid, D-Nev. “Plus not putting it on could gum up the works,” i.e., delay indefinitely action on the underlying NDAA bill. “So, it has an excellent chance,” the lobbyist said.

In a letter last week to Congress, a group of Write-Your-Own companies said that before Congress decides to revise the rate increase programs required under the Biggert-Waters Act of 2012 it “must realize and acknowledge” that any changes will take no less than six months for WYO insurers to implement.

“We hope that any proposed legislative changes would be discussed with the NFIP and other stakeholders as they are being developed to avoid further unintended consequences,” the letter said.

Special Reports /

NCOIL Calls for Flood Rate Hike Delay; Senate Action Could Come by Year-End

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