This week, the Big “I” continued its efforts on behalf of the National Flood Insurance Program (NFIP), which protects millions of homes and businesses across America. On Monday, the Big “I” sent a letter to Sens. Bob Menendez (D-N.J.) and Johnny Isakson (R-Ga.) expressing the association’s support for a bill they sponsored: S. 1846, the “Homeowner Flood Insurance Affordability Act of 2013.”
After a multi-year lobbying effort by the Big “I” and others, Biggert-Waters was signed into law late in 2012. It extended the NFIP for five years—until 2017—and made necessary reforms to the program. While the Big “I” strongly supported the passage of Biggert-Waters to ensure the long-term stability of the NFIP, some significant problems are associated with the implementation of the risk-based pricing provisions of the law. The association now recommends that Congress make minor modifications to both Section 205 (bought/sold) and Section 207 of the legislation to ensure the law works for both individual policyholders and the U.S. economy at large.
Section 205 phases out explicit subsidies for second/vacation homes, commercial properties, severe repetitive loss properties, properties undergoing substantial improvement, and properties experiencing substantial flood damage and rebuilding after substantial flood damage. However, it immediately eliminates all subsidies, with no phase-out, for properties bought and sold. Section 207 stops the “grandfathering” of policies located in communities with a new or redrawn map.
As part of their government funding legislation this week, Congress is set to delay any work on implementation of Section 207 of Biggert-Waters until Sept. 30, 2014. This is a welcome development as it will afford Congress additional time to work on a more comprehensive measure.
The Menendez-Isakson bipartisan bill is one such comprehensive measure, as it would delay implementation of the bought/sold provision from Sec. 205 and the entirety of Sec. 207 until after FEMA conducts the “affordability study” required by Biggert-Waters. S. 1846 would install a procedure for FEMA to issue draft regulations, with affordability in mind, before proceeding with implementation of these two provisions. The bill would potentially mitigate some of the harmful effects of Biggert-Waters, without undoing the numerous positive provisions within the law.
House Financial Services Chairman Jeb Hensarling (R-Texas) is also working on legislation that would hopefully address concerns regarding the risk-based pricing provisions in Biggert-Waters. Additionally, a companion bill, H.R. 3370, has been introduced in the House and has garnered nearly 180 cosponsors.
The Big “I” remains on the forefront of this debate in Washington, D.C. and will continue to advocate for these necessary reforms by working with Congress, the Obama Administration and other industry leaders.
John Prible is Big “I” vice president of federal government affairs. Margarita Tapia is Big “I” director of public affairs.