The conversation focused heavily on the challenges posed by Risk Rating 2.0 and potential reforms to the program. Read more.
July 5, 2022 |
Updated July 6, 2022
The Senate Banking Committee discussed the reauthorization of the National Flood Insurance Program (NFIP) during two hearings earlier this month.
The first hearing focused on protecting communities from flood risk. Stakeholders discussed how the NFIP helps manage and mitigate flood risk, the NFIP and private insurance markets, the Federal Emergency Management Agency’s (FEMA) Community Rating System (CRS) and how reforms and a long-term reauthorization are needed. Stakeholders and Sens. Bob Menendez (D-NJ) and John Kennedy (R-LA) also highlighted emerging challenges and significant rate increases under Risk Rating 2.0. Sens. Pat Toomey (R-PA) JonTester (D-MT) also expressed concerns about the long-term solvency of the program and why there has been a decrease in the private market in this space.
In a separate hearing, FEMA Acting Associate Administrator David Maurstad also testified before the committee outlining FEMA's position on NFIP and answering questions raised at the previous hearing. Topics included repetitive loss properties and equity issues. Senators agree on the need to ensure the program is financially stable and that any long-term reauthorization includes reforms. Lawmakers from the more heavily impacted coastal states: Sens. Kennedy, Mark Warner (D-VA), and Menendez were also critical of FEMA’s Risk Rating 2.0 and thought their proposed flood insurance legislation was better than what FEMA was proposing.
The National Apartment Association (NAA) has submitted a letter to the record outlining our recommendations in support of a long-term reauthorization of the National Flood Insurance Program. NAA urges Congress to prioritize and provide sufficient resources for mapping and greater transparency in Risk Rating 2.0, and for FEMA to undertake further actuarial work and issue alternative mitigation guidance specific to multifamily property. NFIP reauthorization should also include blanket policies, more efficient claim reimbursement and continuous and business interruption coverage.
For more information on the NFIP, please reach out to Sam Gilboard, NAA’s Senior Manager of Public Policy and Maria Spencer, Director of Federal Legislative Affairs, or visit NAA’s flood insurance policy page.