WASHINGTON – U.S. Senators Bill Cassidy, M.D. (R-LA) Cindy Hyde-Smith (R-MS), and two colleagues reintroduced legislation to protect policyholders from higher National Flood Insurance Program premiums until the Federal Emergency Management Agency (FEMA) meets certain accountability and transparency requirements. The Homeowner Flood Insurance Transparency and Protection Act would allow policyholders to retain previous NFIP premium rates rather than the higher rates associated with FEMA implementing the NFIP Risk Rating 2.0 (RR2.0). Despite widespread concerns about how FEMA developed RR2.0, the agency launched full implementation of the reforms in April 2022.
“FEMA has left Louisianans and five million Americans in the dark about rising premiums and Risk Rating 2.0. It has officially been in effect for almost a year, and families in Louisiana are feeling the disaster that is unfolding,” said Dr. Cassidy. “Our bill requires FEMA to provide clear information to policyholders to help lower premiums and reduce flood risk.”
“The effects of RR2.0 on the pocketbooks of flood insurance policyholders have only deepened a sense of mistrust in just how FEMA derived the new premium rates. FEMA still needs to come clean on the methodology it is using in this major change to the National Flood Insurance Program, and my legislation would force them to answer our concerns,” said Senator Hyde-Smith.
FEMA started its RR2.0 rollout in October 2021 despite warnings that it will increase premium costs for almost 80 percent of policyholders and that price increases could drive as many as 900,000 of them to cancel flood insurance coverage—including an estimated 100,000 in Louisiana. According to FEMA, Louisiana, Texas, and Mississippi are among the states that will have at least 80 percent of policyholders paying more in premiums.
The Homeowner Flood Insurance Transparency and Protection Act would protect policyholders while forcing FEMA to address concerns that it developed RR2.0 without adhering to statutes requiring:
- Public notice and comment
- Established policyholder premium appeals process
- Economic impact analysis
- Independent peer review
- Assurance of data reliability
In February, Senator Cassidy delivered a speech on the U.S. Senate floor demanding the Biden administration halt massive hikes to National Flood Insurance Program premiums caused by Risk Rating 2.0. he repeated the need for flood insurance to remain affordable and accessible for the homeowner, accountable to the taxpayer, and sustainable for the future.
He also called out FEMA for its lack of transparency and its stonewalling of Congress regarding its implementation of Risk Rating 2.0 last fall. It had been over a year since Cassidy’s October 2021 request for a briefing with FEMA, on behalf of the Louisiana Congressional Delegation, to discuss the National Flood Insurance Program and the implementation of Risk Rating 2.0. FEMA had yet to fulfill this request despite repeated demands from Cassidy and other members of the delegation.
Last Congress, Cassidy introduced the Flood Insurance Pricing Transparency Act, which would require the public disclosure of formulas used to calculate mitigation credits for policyholders under Risk Rating 2.0. This came after FEMA publicly acknowledged the strong possibility that Risk Rating 2.0 could cause 20% of policyholders to drop out of the program due to skyrocketing premiums.