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NFIP reforms come under political pressure


Advocates of reforming the National Flood Insurance Program may have gained some ground last week when the House of Representatives delayed voting on a measure that would roll back reforms approved in 2012.

The victory, however, may be only temporary as the House could move on a new version of the Homeowner Flood Insurance Affordability Act of 2013, H.R. 3370, which could be brought to the House floor as early as this week.

The bill came under fire from some insurance and environmental groups as well as free market-oriented think tanks as an assault on reforms made to the NFIP by the Biggert-Waters Flood Insurance Reform Act of 2012.

Among other things, the House bill calls for maintaining premium subsidies for the roughly one-fifth of policyholders, many along the East Coast, who currently receive them. It also would repeal a section of Biggert-Waters that called on the Federal Emergency Management Agency to update its flood maps, a result of which would mean some policyholders would pay higher premiums.

The House was scheduled to consider H.R. 3370 last week, but it was removed from the schedule. A spokesman for House Majority Leader Eric Cantor, R-Va., said consideration of the bill was delayed because Republicans were “working with Democrats on the details of the bill” and the revised measure could come before the House floor this week.

The Senate already has approved a measure that would delay the implementation of risk-based rates for NFIP policies for at least four years, but that bill has not been considered in the House.


Proponents of NFIP reform consider risk-based rates as called for under Biggert-Waters to be critical for the program, which currently is about $24 billion in debt. And insurers are not alone in supporting risk-based rates: The White House, Consumer Federation of America, environmental groups and free-market advocates have staked out that position as well.

Reform advocates hailed the delay in House consideration of the bill during a telephone news conference by SmarterSafer.org, a coalition of insurer, environmental and free-market-oriented organizations.

Steve Ellis, vice president of Washington-based Taxpayers for Common Sense, said the delay presented an opportunity for “responsible reform.”

“We view the recent delay as an opportunity for the House to go back to the drawing board and fix this,” Andrew Moylan, a senior fellow at the Washington-based R Street Institute, also said during the news conference. “Pure politics” is driving efforts to roll back the Biggert-Waters reforms, he said.

With much of the House political process going on behind closed doors, “it's hard to interpret delays other than suggestions that they're still trying to resolve some issues in it. And they may have lost some conservative Republican support in the past week,” said Frank Nutter, president of the Reinsurance Association of America in Washington. Democrats want more revisions to the bill he said already is “too aggressive” and “effectively guts the Biggert-Waters Act.”


“I think the delay of consideration of the House Bill is a sign that many members of Congress realize that it's bad policy,” said Jimi Grande, senior vice president of the National Association of Mutual Insurance Cos. in Washington. “Hopefully, it gives us an opportunity to convince the House to create a more responsible reform package that provides targeted assistance without further jeopardizing the solvency of the NFIP.”

“We still have a shot,” Mr. Grande said. “The longer we have, the more people we'll be able to convince that it's bad policy. However, the political pressure being felt by some members of Congress is very real and very powerful.”

“Unfortunately for us, the elimination of Biggert-Waters is good politics in many parts of America,” Mr. Grande said. “Not many politicians have won courage awards in the past few years.”