Statements by members of Congress in Louisiana and MississippiThursday that increases in flood-insurance premiums now beingimplemented will be delayed through a provision in a recentappropriations bill are inaccurate, according to industry lobbyistsand officials at the Federal Emergency Management Agency(FEMA).

Rep. Steven Palazzo, R-Miss., and Rep. Bill Cassidy, R-La. hadsaid a bulletin written by FEMA and sent out Thursday toWrite-Your-Own companies indicated that the rate hikes would bedelayed by a provision in the recently passed appropriationslegislation for the current year sponsored by Cassidy.

Cassidy said rate hikes “for up to 400,000 Louisianans” could besuspended as long as until June 2016.

However, the rate hikes discussed in the statements do notrelate to the most controversial ones contained in Sec. 205 of the2012 Biggert-Waters Act, which mandates a phase-in of actuarialrates on most properties insured by FEMA.

The appropriations bill and the FEMA bulletin relate to Sec. 207of B-W, a provision not scheduled to go into effect for awhile.

A lobbyist in Washington for the WYO companies confirmed thatthe Sec. 205 provisions are not affected by the appropriationsbill. And the FEMA bulletin specifically says it does not affectthe Sec. 205 provisions. It says the Sec. 205 provisions wereeffective as of October 2013.

A FEMA media spokesman confirmed that the Sec. 205 provisionsimplemented starting last October “were not rolled back” by theprovision in the appropriations bill.

Sec. 205 phases out rate subsidies for second homes, businesses,severe-repetitive loss properties, or properties built before theeffective date of the first Flood Insurance Rate Map (FIRM). Therates for these pre-FIRM properties would increase by 25 percentper year until premiums reach an actuarially sound level.

Sec. 205 also bars extension of subsidies to propertiespurchased after the law's enactment, not previously insured by theNational Flood Insurance Program (NFIP) or with a lapsedflood-insurance policy.

Sec. 207 of the law directs FEMA to increase rates over a fiveyear period on any community that receives revised or new floodmaps. It would impact grandfathered rates, some dating back to1969.

The bulletin sent out by FEMA to WYO companies Wednesday dealswith suspension of rate hikes contained in Sec. 207, as per theappropriations bill recently passed by Congress.

FEMA has not yet sent to WYO written instructions as to how tochange their software related to Sec. 207 provisions.

Continuing legislative efforts

Earlier today, Sen. Mary Landrieu, D-La., renewed her requestthat the House consider S. 1926, The Homeowner Flood InsuranceAffordability Act, which was passed by the Senate last week.Tuesday, and Wednesday Republicans in the House blocked requeststhat the bill be placed on the floor for a vote. It has 182co-sponsors.

“We would remind [House Speaker John] Boehner and other membersof Congress that in places like Louisiana, the people who will beaffected are not just the owners of second homes, but those whodrive the energy and seafood and navigation industries. Boehnershould stand aside and let the members of Congress speak for theirconstituents,” Landrieu said.

According to an analysis of the:

• The FEMA administrator has two years to complete anaffordability study and send it to Congress.
• the FEMA administrator has 18 months after the affordabilitystudy goes to Congress to send a new affordability framework toCongress.
• Six months after the framework is due to Congress, theprohibition on premium increases is lifted.

The outside analysis estimates the bill's provisions would take48 months to complete, which would coincide with the sunset of thereauthorization of the NFIP in Sept. 2017.