House-Senate plan could delay flood ins. increase

WASHINGTON – Oct. 29, 2013 – A bipartisan group of lawmakers in the U.S. House and Senate, including Florida Sen. Bill Nelson, announced an agreement to delay flood insurance rate increases under the National Flood Insurance Program (NFIP). The bill – The Homeowner Flood Insurance Affordability Act – will be introduced today.

Important note, however: For the bill to become law, it must pass a vote in the House and Senate, and President Obama must sign it.

Supporters of flood insurance relief see this announcement as a ray of hope – not a declaration of victory.

So far, neither the House nor the Senate has scheduled a vote, and observers say it could be January or later before they take up the issue. In announcing the bill, Nelson said he asked legislative leaders to push for a quick vote.

The legislation would delay rate hikes for probably four years by creating a timeline. First, the Federal Emergency Management Agency (FEMA) would have to complete an affordability study – a requirement that has not yet been met, even though it was part of the original Biggert-Waters Flood Insurance Reform Act that sparked the rate increases. FEMA expects that study to take up to two years.

Once the affordability study is completed, FEMA would have 18 months to propose regulations based on the findings, and six months to allow consumers to respond to its proposed regulations.

“The bill takes the crucial first step toward delaying further implementation of some rate increases in the Biggert-Waters Flood Insurance Reform Act of 2012,” says National Association of Realtors® (NAR) President Gary Thomas. “This will allow FEMA to complete an affordability study that was mandated; propose targeted regulations to address any affordability issues found in the study; and give Congress adequate time to review those regulations.”

Other provisions if the bill becomes law in its current form

• It creates a new Flood Insurance Rate Map Advocate within FEMA to work on behalf of policyholders.

• FEMA must prove, through certification, that the analysis it conducts on an area’s flood insurance risk uses a modern, risk-based approach.

• FEMA may reimburse policyholders who successfully appeal a flood map designation with National Flood Insurance Funds

“NAR supports the ‘Homeowner Flood Insurance Affordability Act,’ and urges its immediate consideration,” says Thomas.