The Senate Banking Committee held a hearing Jan. 25 titled “Reauthorization of the National Flood Insurance Program: Local Perspectives on Challenges and Solutions.” Appearing before the committee were a business leader from New Orleans, the mayor of Athens, Ohio, and a representative from Marsh McLennan.

NAMIC submitted testimony that focused on the property/casualty insurance industry’s unique role in managing climate and flood risks and also offered suggestions to improve the program. The testimony outlined the industry’s long history of supporting strong building codes and mitigation funding, and noted the importance of the program’s reauthorization to protect Americans from catastrophic flood risk. NAMIC’s recommendations to improve the program included:

  • Further use of actuarily sound rates;
  • Better incentives for private-sector participation;
  • Increased investment in resiliency; and
  • Establishment of a narrow, need-based program to assist homeowners facing affordability issues.

Sen. Sherrod Brown, D-Ohio, the committee chair, emphasized in his opening statement the importance of strengthening the program’s flood plain management, mapping, and mitigation. The committee’s ranking member, Sen. Tim Scott, R-S.C., noted the importance taking a local approach to flood insurance and made clear the need for Congress to deal with the program’s rising debt and premiums that make it “unsustainable,” though he also advocated in support of long-term reauthorization.

Importantly, Sen. Katie Britt, R-Ala., criticized the Federal Insurance Office’s climate data call and described it as a “blatant overstep into the state-regulated insurance industry, adding that the Insurance Data Protection Act would serve as a counterbalance to the Biden administration’s efforts on that front. However, Sen. Elizabeth Warren, D-Mass., then made remarks on the importance of the FIO data call, saying that the federal, state, and local governments do not have enough data about affordability of insurance and the impact of climate change. She urged the Biden administration to finalize the data call as soon as possible. Sen. Bob Menendez, D-N.J., expressed his concern regarding NFIP premium increases and touted his bill to cap annual premium increases at 9 percent. Further, Sen. Jon Tester, D-Mont., asked questions about what should be included in a reform bill and encouraged more mitigation efforts. She added that Congress needs to make the program self-sufficient in the future.

There was consensus among committee members that Congress needs to reauthorize the NFIP but that critical reforms are needed in the future to ensure the program stays solvent.

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Publish Date

January 29, 2024

News Type

  • Washington Weekly

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