From the Insurance Journal, provided by one of our Ask The Experts, Jason Huff with Huff Insurance:
The Senate today went along with the House of Representatives by passing a bill to reverse flood insurance reforms and curb flood insurance premium increases.
The Senate approved H.R. 3370, the “Homeowner Flood Insurance Affordability Act of 2013,” by Sen. Bob Menendez (D-N.J.) and Rep. Michael Grimm (R-N.Y.).
The bipartisan bill unwinds some of the changes in the National Flood Insurance Program (NFIP) introduced by the Biggert-Waters Flood Insurance Reform Act of 2012. It amends certain provisions that are causing premiums to jump in some parts of the country.
The Senate approved the bill 72-22 (see how senators voted below). The House passed H.R. 3370 on March 4 in a 306 – 91 vote.
The Menendez-Grimm bill restores “grandfathering” of policies located in communities with new flood maps. It also reinstates subsidies for pre-FIRM properties that are bought and sold.
“Thanks to a strong, bipartisan effort,” said Sen. Menendez, “we have averted the manmade perfect storm that would have crushed thousands of families under the weight of skyrocketing flood insurance rates, forced many from their homes, plummeted property values and destroyed entire communities.”
The Senate had passed its own, broader flood insurance bill (S.1926) but agreed to go along with the House version.
Sen. Johnny Isakson, R-Ga., a sponsor along with Menendez of the original Senate bill, praised the Senate vote. “I am thrilled the Senate was able to come together in a bipartisan manner today to protect millions of hardworking families across the country from the steep increases in their annual flood insurance premiums,” said Isakson.
“It’s not everything I wanted for homeowners, but it’s significant protection from unconscionable rate hikes,” said Sen. Bill Nelson (D-Fla.), another proponent.
According to the Congressional Budget Office, the bill would not add to the $25 billion debt of the NFIP and would pay for itself through annual reserve fund assessments of $25 a year for primary residences and $250 a year for businesses and vacation homes.
The Menendez-Grimm bill now goes to President Obama for his signature. The White House has expressed concern about rolling back the Biggert-Waters reforms.
Realtors, homebuilders and lenders generally supported the legislation to unwind Biggert-Waters while some environmental and taxpayer groups oppose it.
The insurance industry was split over it.
The National Association of Mutual Insurance Companies (NAMIC) has called the bill an unnecessary “overreaction” and said it is disappointed in today’s Senate vote.
“Today’s vote continues a move down the wrong path by Congress on flood insurance reform,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC.
Nat Wienecke, senior vice president, federal government relations for Property Casualty Insurers Association of America said the bill addresses some of the “unintended consequences”of Biggert-Waters.
The measure was supported by independent agents, although they preferred the Senate version because it also contained provisions to streamline agent licensing and create the National Association of Registered Agents and Brokers (NARAB).
“Today’s Senate vote represents a major victory for independent insurance agents, as Section 207 and the bought/sold provision of Section 205 were the two specific items that the Big ‘I’ has been asking Congress to revisit,” said Charles Symington, Big “I” (Independent Insurance Agents and Brokers of America) senior vice president for external and government affairs. “The startling pace with which Congress acted in order to fix the unintended effects of these two provisions in Biggert-Waters, itself less than two years old, should be commended.”
The Big “I” has vowed to continue to work to get the Senate to approve the NARAB legislation, which has been separately approved by the House.
Opponents of both the House and Senate bills argued that the Biggert-Waters reforms and the law’s scaling back of premium subsidies, changes intended to address the $25 billion deficit of the NFIP, should be left intact. Some called for a targeted fix to help homeowners in need rather than a broad repeal of the 2012 changes.
Sen. Richard Shelby (R-Ala.) was among those who voted no.
“One of the goals of the reforms was to ensure that the 5.6 million flood insurance policyholders could collect on their policies if they were ever to suffer a flood loss – something that cannot be guaranteed by a flood insurance program that is currently $25 billion in debt,” Shelby said in a speech on the bill. “The program is bankrupt and only operating by the grace of the American taxpayer.”
Shelby said problems with the implementation of Biggert-Waters could be addressed in “discrete ways that do not require the ‘stop everything’ approach” of this legislation. Read More HERE
