“We've witnessed the NFIP fail our constituents in their greatest hour of need and, after countless reauthorizations that simply kick a broken can down the road, we want real reform,” Senator Menendez, a senior member of the Senate Banking Committee that oversees the NFIP and chair of the Superstorm Sandy Task Force, said in a statement. “With the National Flood Insurance Reauthorization and Reform Act of 2019, we can make the program more sustainable, more affordable, hold FEMA and private contractors accountable, and invest in the kind of forward-looking mitigation that reduces risk and prevents costly flooding in the first place.”

“This legislation ensures the NFIP works for the homeowners that depend on it,” said Dr. Cassidy. “The reforms in this bill are critical to any reauthorization effort to make the program sustainable and prevent families from being hit with drastic premium increases.”

The NFIP Re reauthorizes the NFIP for five years. In addition, the senators said, the bill:

Caps annual increases at nine percent. Currently, premiums can more than double every four years or less and the new methodology adopted by the Federal Emergency Management Agency (“FEMA”) called Risk Rating 2.0 “will alter premiums on every policy in the country.” The bill puts “guardrails on FEMA's new rating methodology” and will “safeguard policyholders from sudden rate shocks.”

Affordability for low- and middle-income policyholders. Provides a means-tested voucher for millions of low- and middle-income homeowners and renters if their flood insurance premium causes their housing costs to exceed 30 percent of their adjusted gross income.

A path to NFIP solvency. Freezes interest payments on NFIP debt and reinvests savings towards mitigation efforts to restore the program to solvency and reduce future borrowing.

Limits on private insurance company profits.  Caps write-your-own (“WYO”) compensation at the rate FEMA pays to service its own policies and redirects the savings to pay for the means-tested affordability program.

Increased cost of compliance (“ICC”) coverage.  Increases the maximum limit for ICC coverage to better reflect the costs of rebuilding and implementing mitigation projects. In addition, ICC coverage eligibility is expanded to encourage more proactive mitigation before natural disasters strike.

Strong investments in mitigation.  Provides robust funding levels for cost-effective investments in mitigation, which have a large return on investment and are the most effective way to reduce flood risk.

More accurate mapping.  Authorizes funding for light detection and ranging (“LiDAR”) technology for more accurate mapping of flood risk across the country.

Oversight of WYO companies. Creates new oversight measures for insurance companies and vendors, and provides FEMA with greater authority to terminate contractors that have a track record of abuse.

Claims and Appeals Process Reforms Based on Lessons from Superstorm Sandy. Reforms the claims process based on lessons learned in Superstorm Sandy and other disasters, “to level the playing field for policyholders during appeal or litigation, bans aggressive legal tactics preventing homeowners from filing legitimate claims, holds FEMA to strict deadlines so that homeowners get quick and fair payments, and ends FEMA's reliance on outside legal counsel from expensive for-profit entities.”

Better Training. Provides for increased training and certification of agents and adjusters to reduce mistakes and improve the customer experience.

The bill allows FEMA to fire consultants, contractors, law firms, engineering firms, and any other third-party company involved in NFIP contracts who deliberately mishandle claims to lower what insurance companies must pay to homeowners after a disaster. Currently, FEMA can only make a termination when there is a criminal conviction.