A Stormy Debate Ensues Over Flood Insurance Reauthorization
After a recent series of severe storms over several years resulted in $24.6 billion of debt, Democrats and Republicans agreed that the National Flood Insurance Program (NFIP) could be improved before reauthorization. They disagreed, however, on how to make that happen.
During a House Financial Services Committee markup, members approved two of seven bills that would reform and reauthorize the NFIP. After debating and rejecting three Democratic amendments that Ranking Member Maxine Waters (CA-43) said would “provide the reauthorization language needed to keep the NFIP’s doors open and keep the real estate market from spiraling out of control,” Republicans managed to squeak out approval for the 21st Century Flood Reform Act (H.R. 2874) with a vote of 30-26. Every single Democrat and one Republican, Representative Peter King (NY-2), voted against it.
Despite its financial troubles, the NFIP has provided important services to coastal communities since 1968. Operated by the Federal Emergency Management Agency (FEMA), the NFIP provides flood insurance for 5.1 million policyholders, identifies and maps flood risks, and runs programs to incentive flood risk reduction. H.R. 2874 seeks, in part, to put NFIP on more secure financial footing and to use new technology and better maps to improve development of accurate flood estimates. However, Democrats took issue with increased policy prices and premiums for homeowners, which they felt were unaffordable and could leave many uninsured. The bill’s sponsor, Chairman Sean Duffy (WI-7) hoped that a $1 billion amendment to fund local mitigation projects would ease their concerns, but Ranking Member Waters retorted, “This amendment does little to improve a fundamentally bad piece of legislation.” In her opening statement, Ranking Members Waters specifically referenced concerns with the legislation, including the potential for foreclosures, impacts of surcharges and fee increases, unintended consequences of raised premiums, and the cumulative effect on cost for policyholders.
The second bill in the reauthorization package, the National Flood Insurance Program Policyholder Protection Act of 2017 (H.R. 2868), which seeks to keep policyholders from paying unreasonable premiums and requires NFIP to consider unique mitigation strategies for urban environments, was unanimously approved. On Wednesday, June 21, the committee plans to markup five more bills to reform the flood program: the Flood Insurance Market Parity and Modernization Act (H.R. 1422), the Repeatedly Flooded Communities Preparation Act (H.R. 1558), the Taxpayer Exposure Mitigation Act of 2017 (H.R. 2246), an act to require the use of replacement cost value in determining the premium rates for flood insurance coverage under the National Flood Insurance Act (H.R. 2565), and the National Flood Insurance Program Administrative Reform Act of 2017 (H.R. 2875).