The Homeowner Flood Insurance Affordability Act

Floor Speech

Mr. THOMPSON of Pennsylvania. Mr. Speaker, today I rise to discuss the Homeowner Flood Insurance Affordability Act, a bipartisan bill to delay further implementation of flood insurance rate increases that took effect on October 1, 2013, under the National Flood Insurance Program.

Congress last year, on a bipartisan basis, passed the Flood Insurance Reform Act of 2012. The measure included long overdue reforms to strengthen the financial solvency and administration efficiency of the National Flood Insurance Program. The rationale for the 2012 law was the need for the National Flood Insurance Program to more accurately reflect flood risk.

Historically, most low-risk States subsidize high-risk coastal States. Similarly, low-risk areas within States tended to subsidize those areas with higher risk, which were more prone to flooding.

The linchpin of the 2012 law was to use true actuarial rates in order to prevent very low-risk areas from subsidizing moderate- to high-risk areas.

The unintended consequence has been drastic premium increases for those plans that were traditionally subsidized by the National Flood Insurance Program. Under the 2012 law, Congress mandated that the Federal Emergency Management Agency, FEMA, complete an affordability study to further evaluate any unintended consequences as a result of the changes. This study was to be completed before the rate increases went into effect, which was crucial to understanding the full scope of the new risk model.

FEMA has failed to complete the affordability study that was required under the law. Additionally, it remains a huge concern that FEMA does not have the data it needs to accurately determine risk under this new policy regime and is incapable of creating a new mapping system that truly reflects true actuarial rates.

While 80 percent of policyholders will not see increases as a result of the new policy, a small portion of properties are being hit with staggering increases. This is a serious concern for communities and individuals across the country, including many from the Fifth District of Pennsylvania, which I am proud to represent.

I joined yesterday with colleagues on both sides of the aisle as an original cosponsor of the Homeowner Flood Insurance Affordability Act, legislation to delay, for 2 years, the higher rates brought on by the 2012 law until there is an affordability study completed by FEMA. The bill also makes structural changes at FEMA to assure that there is an advocate for homeowners when flood maps are drawn or adjusted.

Mr. Speaker, improving the financial viability of the Nation's Flood Insurance Program while ensuring that the program protects those it was designed to support is something every Member of Congress should support. I encourage my colleagues to join in this commonsense effort to protect and improve our Nation's Flood Insurance Program by cosponsoring the Homeowner Flood Insurance Affordability Act.

Source