The U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing, “Reauthorization of the National Flood Insurance Program: Protecting Communities from Flood Risk."
The hearing included witness testimony from Jana N. Henderson, CFM, Office of Mitigation director and state hazard mitigation officer, Mississippi Emergency Management Agency; Dr. Peter Van Doren, senior fellow, The Cato Institute; Jerry Theodorou, director, Finance, Insurance and Trade Policy Program, R Street Institute; Douglas E. Quinn, executive director, American Policyholder Association; and Professor Sam Brody, director, the Institute for Disaster Resilient Texas.
The hearing covered several important topics, including the role of the Write-Your-Own (WYO) program, affordability issues, mapping and mitigation, private flood insurance and Risk Rating 2.0.
The Big “I" submitted written testimony that underscored the importance of finally enacting a long-term reauthorization of the NFIP after numerous short-term reauthorizations. Additionally, the Big “I" emphasized the importance of increasing take-up rates for flood insurance — whether it be through the NFIP or the private market.
The Big “I" also advocated for S. 2915, the “Flood Insurance Consumer Choice Act," introduced by Sen. Rick Scott (R-Florida). This important legislation would clarify that private flood insurance can satisfy NFIP continuous coverage requirements, which means that if a consumer leaves the NFIP for the private market and conditions change, the consumer can return to the NFIP without penalty.
The Big “I" statement also called for allowing refunds for unearned premiums for the mid-term cancellation of NFIP policies if a consumer elects to purchase a policy from the private flood insurance market.
Finally, the Big “I" testimony touched on Risk Rating 2.0 and noted that the Big “I" believes that Risk Rating 2.0, if properly implemented, has the potential to improve the NFIP experience for consumers but the rollout of the program will be critical in determining its success.
Additionally, the Big “I" noted that to make the rollout successful, FEMA must work hand in hand with WYO carriers and agents, noting that FEMA must do more to make the rating process more transparent for both agents and consumers.
In other flood insurance news, Rep. French Hill (R-Arkansas), the top Republican on the Housing, Community Development, and Insurance Subcommittee on the U.S. House Financial Services Committee, introduced H.R. 8036, the "National Flood Insurance Program (NFIP) Extension Act of 2022." The bill extends the NFIP on a stand-alone basis to December 31, 2023. When introducing the legislation, Rep. Hill noted that the “bill offers consumers predictability through the end of 2023 while we work on a long-term solution and reform." The bill has 16 cosponsors, all Republicans, including Rep. Patrick McHenry (R-North Carolina), the top Republican on the House Committee on Financial Services.
As Congress continues to discuss reauthorizing the NFIP, the Big “I" will continue to provide members with updates in the weekly News & Views e-newsletter.
Wyatt Stewart is Big “I" assistant vice president of federal government affairs.
Independent Insurance Agents of Virginia