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Wednesday, November 20, 2013

House Subcommittee Holds Hearing on Flood Insurance - No Easy Fix

Yesterday, the House Financial Services Housing and Insurance Subcommittee held a hearing on the National Flood Insurance Program (NFIP) and the implementation of the Biggert-Waters Act. The hearing focused on addressing the NFIP's debt and delaying the flood insurance rate increases included in the Biggert-Waters Act. 

There is bipartisan support for Rep. Grimm's Homeowner Flood Insurance Affordability Act of 2013 (H.R. 3370), which would delay the flood insurance rate increases for four years and require FEMA to complete an affordability study. At this time, H.R. 3370 has 134 cosponsors, including Rep. Waters.

The first panel included only one witness, Craig Fugate, Administrator, Federal Emergency Management Agency and Rep. Waters expressed her dissatisfaction with FEMA's implementation of the Biggert-Waters Act.

During the Hearing, Rep. Waters stated "I believe FEMA cut corners and did not complete two important tasks that were central points to the Biggert-Waters legislation. First, the law called for FEMA to improve the accuracy of its mapping process. And most importantly, the Agency was required to complete an affordability study that would give Congress a sense of how rate increases would impact the cost of flood insurance for ordinary Americans and what could be done to address affordability. But FEMA decided not to complete either one of these tasks. Instead, it just announced dramatic rate increases for many of its policyholders."

The opinion that FEMA should delay the rate increases until they complete an affordability study and ensure that the flood maps are accurate was common among both Republicans and Democrats. However, the hearing demonstrated that there are still differences to resolve among the Committee and Subcommittee members.
Subcommittee Chairman Randy Neugebauer said, "[a]fter more than a decade in Congress, if I have learned anything, it is that the federal government does a terrible job of underwriting and pricing risk, and that has very real consequences for taxpayers who end up footing the bill for the government’s failures."

Learn more about the hearing and watch an archived Webcast of the hearing.

Read a press release by Rep. Waters.

Read a press release from the House Financial Services Committee.