The bill would require FEMA to publish the formulas used to calculate policyholder mitigation credits under Risk Rating 2.0.
Earlier this week, Sen. Bill Cassidy (R-Louisiana) and Sen. Kirsten Gillibrand (D-New York) introduced S. 3829, the “Flood Insurance Pricing Transparency Act."
The bill requires FEMA to publish the formulas used to calculate mitigation credits for policyholders under Risk Rating 2.0. The legislation also requires FEMA to release a toolkit that could be used to estimate the cost of insurance for new construction under Risk Rating 2.0, without compromising proprietary information.
Risk Rating 2.0, FEMA's new pricing methodology for the National Flood Insurance Program (NFIP), went into effect Oct. 1, 2021, for all new policies and offered insureds the option to renew under Risk Rating 2.0 or the existing NFIP framework. However, the NFIP has now moved into Phase II of Risk Rating 2.0, which focuses on transitioning all existing policies. Beginning April 1, 2022, all policies must be priced under Risk Rating 2.0 at renewal.
With April 1 just around the corner, FEMA is currently offering new webinars for agents that will focus on the renewal process under Risk Rating 2.0.
As FEMA continues to provide more information regarding Risk Rating 2.0, 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.