WASHINGTON – U.S. Senator Bill Cassidy, M.D. (R-LA) today introduced Greater New Orleans (GNO), Inc. President Michael Hecht at a U.S. Senate Banking Committee hearing on reauthorizing and reforming the National Flood Insurance Program (NFIP). Cassidy worked with the Committee Chairman, Senator Sherrod Brown (D-OH), to schedule the hearing and secure Hecht an opportunity to testify.
“Risk Rating 2.0 has made flood insurance simply impossible to afford,” said Dr. Cassidy. “At this point, we know we are in an actuarial death spiral, where people will be dropping insurance because they can no longer afford it.”
Last year, Cassidy reintroduced his National Flood Insurance Program Reauthorization and Reform Act to reauthorize the program for five years and implement a series of sweeping reforms to reduce costs, make generational investments in communities to reduce flood risk, and establish a fairer claims process for policyholders. He participated in a roundtable hosted by GNO, Inc. and the Coalition for Sustainable Flood Insurance before introducing the bill to hear from community leaders and advocates on the issue.
Cassidy also traveled St. Bernard Parish last August to talk with residents about their flood insurance premiums, resulting in the second episode of his series Bill on the Hill. Here’s more of what people are saying.
In February 2022, FEMA publicly acknowledged an internal study finding that the implementation of Risk Rating 2.0 to the National Flood Insurance Program (NFIP) could cause 20% of policyholders to drop out of the program due to skyrocketing premiums. Learn more here.
Click here to watch Cassidy’s full speech. Cassidy’s remarks as prepared for delivery are below:
Thank you, Chairman Brown and Ranking Member Scott for holding this hearing on such an important topic.
Today, I have the privilege of introducing Greater New Orleans or GNO, Inc. President and CEO, Michael Hecht.
Mr. Hecht moved to New Orleans in the wake of Hurricane Katrina with the goal of helping the city rebuild.
Before that, he earned an MBA from Stanford after earning a bachelor’s degree from Yale. After 9/11, Mr. Hecht took a role in the New York City Mayor’s office running their small business recovery program.
Then when Hurricane Katrina hit our state, devastating tens of thousands, Mr. Hecht took action. He began by running a similar quarter-billion-dollar Katrina Small Business Recovery Program for the state government.
A consistent theme throughout Mr. Hecht’s career is that he specializes in lifting up communities after tragedy strikes.
Now in his current role at GNO, Inc., he continues that effort, bringing business and economic development back to New Orleans and Southeast Louisiana.
There are many lingering effects of Hurricane Katrina, with one of the most obvious being the methods we use to assess flood risk.
One of the largest barriers keeping new businesses and families from returning to Louisiana like Mr. Hecht did is the rising cost of flood insurance.
NFIP’s new risk assessment policy called Risk Rating 2.0 has made flood insurance simply impossible to afford. In some cases, the cost of new policies has risen by over 1000%.
Flood insurance premiums have been known to now be higher than a home’s mortgage.
With an estimated 900,000 policyholders—or one-fifth of the program—expected to drop their NFIP policies once Risk Rating 2.0 takes full effect, the challenge that Mr. Hecht and Louisiana families face is only getting worse.
Some of my colleagues and I have offered a solution that reforms the program. And while we can discuss which reforms are best, I think we can all see that NFIP desperately needs to be both reauthorized and reformed.
I am looking forward to hearing Mr. Hecht’s testimony highlighting this need for serious NFIP reform, and especially appreciate him taking the time to testify during a busy Washington Mardi Gras week.
I am confident his knowledge and experience will be an excellent resource for the committee.