Financial Regulation News
Sens. Cassidy, Hyde-Smith sponsor bill to lower flood insurance costs
By Dave Kovaleski
U.S. Sens. Bill Cassidy, M.D. (R-LA) and Cindy Hyde-Smith (R-MS) introduced legislation that seeks to protect policyholders from higher National Flood Insurance Program (NFIP) premiums until the Federal Emergency Management Agency (FEMA) meets certain accountability and transparency requirements.
Their bill, 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).
“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,” Cassidy said. “Our bill requires FEMA to provide clear information to policyholders to help lower premiums and reduce flood risk.”
FEMA rolled out RR2.0 in October 2021 despite warnings that it will increase premium costs for almost 80 percent of policyholders. They were also cautioned that those price increases could drive as many as 900,000 to cancel flood insurance coverage. 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 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,” Hyde-Smith said.
The Homeowner Flood Insurance Transparency and Protection Act would protect policyholders while forcing FEMA to address concerns about RR2.0.