New Orleans Times-Picayune - FEMA Tells Congress It has Returned to Old Flood Insurance Rate Tables to Reflect New Law

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Top Federal Emergency Management Agency officials told members of Congress Thursday the agency is now using rate tables in effect before the 2012 Biggert-Waters law increased premiums for many policyholders.

The action, the officials said, came in response to the Homeowner Flood Insurance Affordability Act, signed into law by President Barack Obama on March 21. The new law cancelled many of the higher premiums mandated by Biggert-Waters law.

Going back to the earlier tables, a FEMA spokesman said, was the quickest way to provide the premium relief called for the affordability legislation.

The FEMA officials, led by lead flood insurance administrator David Miller, told Congressional Home Protection Caucus members that policyholders still receiving notices of rate increases should check with their insurance company representatives who might be using the wrong tables, according to participants at the session. The caucus is led by Rep. Bill Cassidy, R-Baton Rouge.

The FEMA officials also told the caucus that the agency is making progress is reflecting locally build, or restored levees in flood risk maps. That's something the agency promised to do last year after local officials said it made no sense just to credit levees built by the federal government when local and state funded facilities also reduced flood risk.

The officials also said the surcharges imposed by the Homeowner Flood Insurance Affordability Act -- $25 for residential properties and $250 for non-residential properties -- could help shore up the program's reserve fund.

The fee for all 5.6 million flood insurance policyholders was imposed as part of the affordability act to offset the lost revenue from reversing key Biggert-Waters provisions designed to make the program more self-sufficient.

Those higher premiums, lawmakers said, were often unaffordable.

"Passing the bill is only part of the process in making sure families start to see flood insurance relief," Cassidy said after the meeting. "FEMA's implementation of it is another part. There have been a lot of changes to the National Flood Insurance Program in the past few months, but it looks like FEMA's is moving in the right direction."

Sens. David Vitter, R-La., and Thad Cochran, R-Miss., also met Thursday with Miller, the flood insurance administrator.

"Sometimes FEMA needs a little coaxing to get things right," Vitter said.

On Tuesday, Miller talked to Sen. Mary Landrieu, D-La., and announced the agency had complied with one key component of the Homeowner Flood Insurance Affordability Act by no longer adjusting rates to market levels for homes and businesses that change ownership. In some cases, the rate increases for the new owners were double, triple, even 10 times and more previous premiums.

The Homeowner Flood Insurance Affordability Act calls on FEMA to strive to keep annual increases in premiums to 18 percent or less.

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