Apr 16 2021
MADISONVILLE, La. – Sen. John Kennedy (R-La.), member of the Senate Banking Committee, wrote to committee Chairman Sherrod Brown (D-Ohio), calling for a hearing to examine Risk Rating 2.0, a new rating system under the National Flood Insurance Program (NFIP).
“The NFIP is the primary source of flood insurance coverage for residential properties in the United States. Five million families depend on the NFIP. Risk Rating 2.0 will bring the biggest change to NFIP insurance premiums since the NFIP program began, including rate increases and mandating new policies. I have serious concerns about Louisiana families being able to afford flood insurance under the proposed Risk Rating 2.0. The NFIP only makes sense if homeowners can afford it,” wrote Kennedy.
“Since the end of FY 2017, Congress has enacted 16 short-term NFIP reauthorizations with the expectation that Congress would consider reform. That time is now. Congress should oversee and debate any changes to the program, especially substantial changes to the program such as Risk Rating 2.0,” continued Kennedy.
The Federal Emergency Management Agency (FEMA) is bypassing Congress to initiate Risk Rating 2.0, which is scheduled to go into effect for new NFIP policies on Oct. 1, 2021. New rates for existing NFIP policyholders will go into effect on April 1, 2022. This rating system would change the way premium rates are calculated, potentially making flood insurance unaffordable for Louisiana families in flood-prone areas.
Kennedy requested FEMA Deputy Associate Administrator of Insurance and Mitigation and Senior Executive of NFIP, David Maurstad, testify before the committee.
The full text of the letter is available here.