Senate Votes to Delay Flood Rate Hikes Four Years; Fate in House Uncertain
On January 30, the U.S. Senate passed legislation that would effectively delay for up to four years flood-insurance rate hikes imposed by the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12). The Homeowner Flood Insurance Affordability Act of 2014 (S. 1926) passed by a vote of 67-32.
“PIA supports risk-based rates that take consumer affordability into consideration,” said PIA National Executive Vice President & CEO Mike Becker, in comments to the National Underwriter, Insurance Journal and Best’s News Service. “This bill provides needed relief for some policyholders facing big increases in their flood insurance premiums. It does that by ‘kicking the can down the road’ for four years on implementing actuarially sound rates needed to stabilize the program. At some point, Congress will have to address a long-term solution. This bill does not provide a solution, only a postponement.”
Becker added, “PIA strongly supports the National Flood Insurance Program (NFIP) because it offers critical support to those affected by floods and provides the coverage that the private market is unable to insure.”
The action by the Senate shifts the focus back to the House. Speaker John Boehner (R-Ohio) has said that he will not bring up the measure, which faces strong opposition from two influential conservative groups, Heritage Action and Americans for Prosperity. It is also opposed by the Republican chair of the House committee where BW-12, which authorized the rate hikes, originated in 2012. Nevertheless, House Republican leaders could come under enough pressure to come up with a scaled-down bill.
Senate Votes to Delay Flood Rate Hikes (National Underwriter 1/30/14)
Senate Passes Flood Insurance Delay (Insurance Journal 1/30/14)
Industry Split in Support as Bill to Delay NFIP Rate Increases, Enact NARAB II Passes Senate(Best’s News Service 1/30/14) (subscription)