With Flood Insurance Overhaul Stalled in Congress, FEMA Moves to Tweak Program on Its Own
The
Officials at
The administrative moves bypass
The tweaks come as the program, already roughly
The NFIP took out reinsurance coverage -- a backstopping policy for insurers that pays out if covered losses exceed a certain threshold -- in 2017. Those policies ended up covering around
The program will pay fees to more than two dozen reinsurance companies this year for additional coverage. That could cost the program money if few floods in the coming year lead to only minimal claims -- but it'll also limit the blow from to the program from another catastrophic season.
If claims to the NFIP top
The two other significant changes unveiled by
At the same time, "Write Your Own" companies will see the cut the NFIP pays them for selling policies trimmed back slightly, a move that could either result in lower premiums for policyholders or send more money to the NFIP to pay claims.
"We need more people selling these products," Wright said.
Insurance industry groups mostly welcomed
"The flooding events in 2016 and 2017 clearly show that too few property owners purchase flood coverage," said
Members of
Sen.
Fellow
A large number of NFIP policyholders, including many Louisianans, pay below-market rates because of "grandfathering" rules that can leave the premiums on an older property artificially low even if
Among the concerns is that "Write Your Own" companies could use their access to the NFIP's extensive and detailed database of flood history and past claims to strategically undercut the federal program on rates. The NFIP's data, including details on past claims for each property in the program, give it a huge potential advantage over private competitors in determining a property's future risk of flooding.
The
"We need more people covered for flood risk and I don't think, given how
Cassidy's proposed NFIP overhaul would have essentially created a pilot program allowing private insurers to compete directly against the NFIP only in certain segments of the market. Under the Cassidy-Gillibrand proposal, private competitors could have paid the NFIP to access the program's historical loss data.
Rapidly hiking premiums on those properties -- as some budget hawks who've criticized the NFIP as fiscally unsustainable have proposed -- could tank home values and wipe out equity.
But Graves said in an interview last week that
"I think it's problematic for
The
That bill also included a larger cut to the compensation for "Write Your Own" companies than
Scalise, the House's No. 3 Republican, embraced some of the policies
"Exploring creative ways to reform NFIP will be necessary as we work toward a long term reauthorization of the program," Scalise said, "and this includes reinsurance, engaging the private sector in flood insurance and more accurate mapping for areas like south
But Scalise also vowed to protect homeowners with below-market "grandfathered" rates in any long-term deal on the NFIP "so that people who played by the rules aren't penalized or kicked out of the program."
The
The
Just when
Sharp disagreements over the future role of the private market in flood have played a significant role holding up a long-term deal on the program.
It's too soon to tell whether
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