Flood insurance increases delayed in
Senate
From: Robin Blackstone, ENN.com
The floodgates have opened on the legislative debate surrounding flood insurance. On January 27, followed by remarks by Senator Robert Menendez, D-NJ, the Senate voted 86-13 to begin debate to delay the increases mandated by the 2012 law for four years.
Proponents of the
Homeowner Flood Insurance Affordability Act say that the price of coverage is
too high for many policyholders making their homes unaffordable. Fifty five
percent of Americans live within 50 mile of the coast.
The National Flood Insurance Program insures more than 5.5 million properties across all 50 states. Rate increases affecting premiums all over the country. Proponents say that while The 2012 Biggert-Waters law was intended to make the flood insurance program fiscally solvent, it forces changes that are far too large and fast causing people to lose their homes.
Menendez acknowledges,
"The flood insurance program needs to be put on a more solvent trajectory,
(but) we first need to understand the scope of these changes and be sure the
mapping process used to set these rates is accurate. We need to understand the
impact that these dramatic changes in Biggert-Waters will have on the housing
market before it's too late.
It requires FEMA to
increase rates dramatically, even before FEMA knows the scope of these changes
or how they will impact program participation. That's why our bill would
impose a moratorium on the phase-out of subsidies and grandfathers included in
Biggert-Waters for most primary residences until FEMA completes the
affordability study that was mandated in Biggert-Waters and proposes a
regulatory framework to address the issues found in the study."
The White House is
concerned that delaying the law will further erode the National Flood Insurance
Program, which is already $24 billion in debt reducing FEMA's ability to pay
claims by all policyholders in the future.
In a statement, the
Office of Management and Budget says, "FEMA is working diligently with the
National Academy of Sciences to conduct a study on insurance affordability for
economically distressed policyholders.
The Administration recognizes that many
policyholders may be challenged financially by the new rates and remains
committed to working with the Congress to develop approaches that ensure
economically distressed policyholders are not unduly burdened while maintaining
the financial stability of the NFIP."
According to Sen. Mary
Landrieu, D-LA, "The bill had good intentions, (but) it's had very
detrimental consequences, and so this bill that we're going to go to debate on,
the Menendez-Isakson bill, is really a good-faith attempt to correct some of
the problems with the Biggert-Waters and to lead us in a direction to a place
where the country can have a public-private partnership for flood insurance
that actually works."
With the delay secured,
the Senate will consider several amendments culminating with a final vote as
early as Wednesday.
Read more at: Congress.Gov.