The Consumer Federation of America is urging the House of Representatives to reject a Senate measure that would delay implementation of risk-based premiums for flood coverage provided by the National Flood Insurance Program for four years.
Charging actuarially based rates for flood coverage was one of the key provisions of the Biggert-Waters Flood Insurance Reform Act of 2012. A bipartisan Senate bill passed in January would delay implementation of such rates for four years.
The Obama administration, much of the property/casualty insurance industry, environmental groups and free-market advocates all support having the debt-ridden NFIP charge actuarially based rates. However, many policyholders confronted with large premium hikes under the revised rate system have complained to lawmakers.
The House has yet to take up the Senate bill, and House Majority Leader Eric Cantor, R-Va., said last week that he intends to unveil legislation that would counter the Senate measure.
The CFA called on the House to reject the measure. In a statement released Wednesday after the Washington-based consumer group sent a letter to the House, the CFA said the Senate bill would “have the effect of misleading tens of thousands of homeowners concerning their vulnerability to flooding, undermine the flood program's viability and increase taxpayer costs.”
The organization called on Congress to refocus the NFIP “on ensuring actuarially sound rates and then using a stand-alone program of transparent subsidies to improve affordability for low-income homeowners in flood zones during a transition to full rates for all structures in flood plains in the United States.”