Efforts to Delay Implementation of NFIP Reforms Under the Biggert-Waters Act

Statement From Jimi Grande
Senior Vice President of Federal and Political Affairs
National Association of Mutual Insurance Companies

Re: Efforts to Delay Implementation of NFIP Reforms Under the Biggert-Waters Act

“NAMIC strongly urges Congress to resist any efforts to delay the reforms adopted under the Biggert-Waters Act, which was passed only a year ago with overwhelming bipartisan support. What NAMIC argued then holds true today, that these reforms are vital to moving the NFIP toward fiscal stability and reducing the need for additional taxpayer funded bailouts.

“The gradual transition by the NFIP to charging actuarially sound, risk-based prices for coverage is a key part of those reforms. With the program already $28 billion in debt, delaying these reforms only means a continuation of the suppressed rates that leaves the NFIP unable to meet its obligations and the taxpayers on the hook for more bailouts. In those cases where assistance is truly needed, NAMIC supports providing assistance - on a means-tested basis - for those property owners who truly cannot afford the new rates. It is important, however, that any assistance to low-income homeowners should be fully transparent and not hidden as suppressed premiums that leave the homeowner blind to the actual risk they face from flood and the NFIP underfunded.

“Rather than undoing the progress made through Biggert-Waters, NAMIC urges Congress to focus on mitigation as a means of reducing the costs of natural catastrophes. Simple measures, such as enhanced building codes, have been shown in numerous studies to significantly reduce losses from extreme weather, with every $1 spent by government on mitigation saving $4 in losses. Rather than the government using rate suppression for flood insurance, consumers should understand the perils they face and take the necessary steps to mitigate against future damage.

“NAMIC, along with its partners in the BuildStrong Coalition, are working with lawmakers to advance legislation to use existing federal grant money to incentivize states to take the necessary steps toward mitigation. The Safe Building Code Incentive Act would create incentives for states to adopt and enforce strong statewide building codes on a state-wide basis, which not only saves lives and protects businesses and communities, but leaves the taxpayers less-exposed to future emergency funding measures.”

NAMIC recently sent a letter on this issue to congressional leaders, which can be found here.

Matt Brady
Director - Federal Public Affairs