House Republicans have re-introduced their NFIP rate-hike delay legislation, but while it shares a bill number with legislation they introduced last week, it contains a number of key differences.
The bill was introduced late Friday and its number, H.R. 3370, is the same as the bill introduced by Republicans the prior Friday night.
The legislation prevents FEMA from increasing premiums within a single property class beyond a 15% average a year, with an individual cap of 18% a year.
The bill also permanently repeals Sec. 207 of the Biggert-Waters Act, meaning that "grandfathering" is reinstated, according to one analysis. Essentially, all post-FIRM properties built to code at the time of construction will have protection from rate spikes due to new mapping since the time of construction.
The bill applies an annual surcharge of $25 for primary residences and $250 for second homes and businesses, until subsidized policies reach full risk rates. All revenue from these assessments would be placed in the NFIP reserve fund, which was established to ensure funds are available for meeting the expected future obligations of the NFIP.
It also says FEMA shall strive to minimize the number of policies with premium increases that exceed 1% of the total coverage of the policy (e.g., 1% of $250,000 = $2,500).
Furthermore, Write-Your-Own companies could effectively be allowed until next July to readjust paperwork dealing with the rate-structure overhaul.
Another key provision mandates that policyholders who purchased grandfathered properties after the 2012 law went into effect on July 6, 2012 will get refunds. However, FEMA, and not WYO companies, will be tasked with dealing with the refund issue.
The bill was filed late Friday in order to set up a Wednesday vote under accelerated rules that require a two-thirds vote in support, or 287 votes.
Since congressional analysts and staffers estimate that up to 80 conservative Republicans would oppose the bill, strong Democratic support would be required.
It was written this time with the cooperation of House Democrats, with the direct involvement of House Majority Leader Eric Cantor, R-Va., and Minority Leader Nancy Pelosi, D-Calif.
However, Rep. Cedric Richmond, D-Louisiana, voiced caution. An aide confirmed a statement in which Richmond, who represents New Orleans, said Democrats still want further modifications in the bill. Richmond's staffer said Democrats also want to determine if the bill is acceptable to Sen. Mary Landrieu, D-La., and other Senate sponsors of the legislation the Senate passed Jan. 30.
The Senate bill would delay premium increases for four years to give FEMA a chance to complete an affordability study and for Congress to modify the 2012 Biggert-Waters law that led to the insurance rate increases.
An industry lobbyist who asked not to be named said he thought the Senate would accept the House bill. He said the Senate bill merely delayed implementation of legislation that now has no political support.
Most industry officials were not available for comment because Washington was officially closed due to heavy snow. However, the Independent Insurance Agents and Brokers of America did voice strong support.
The bill also picked up support from the GNO (Greater New Orleans Organization), and a coalition of bankers, mortgage servicers, Realtors' organizations, homebuilders and community organizations in Louisiana the GNO has created to build support for modifying the 2012 law. The IIABA is also a member of that coalition.
However, StopFemaNow, a coalition of 300,000 groups and individuals in 22 states, opposed the legislation. George Kasimos, a New Jersey Realtor who heads the group, said the House bill was written to be "budget-neutral," that is, to ultimately yield the same revenue as the 2012 bill. But, he said, FEMA is "grossly-mismanaged," and that if "the mismanagement issues were rectified our increases would be minimal, if at all."
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