The new House bill HR 3167 was passed out of the Financial Services Committee on a 59-0 vote.  It is expected to be considered by the full House later this month. The section by section provisions of the bill outline some measures of affordability but falls short of true consumer protections.

Monroe County Director of Legislative Affairs, and FIRM Board member, Lisa Tennyson has provided a thorough analysis of the bill to the Board of County Commissioners and has allowed FIRM to share with our members:

Our main concern with this bill is that it does not sufficiently protect affordability for all policy holders.  Instead, it proposes a narrow, means-tested approach to affordability by establishing a 5-year pilot program for primary home-owning policy holders who are at 80% AMI.  For these policyholders, the maximum chargeable premium rate will not exceed 2% AMI (for Monroe County that would be $1,680.) For those not at or below 80% AMI, the current, steep caps on annual increases remain in effect: 18% for primary homes and 25% for second homes and commercial properties. 

We aren’t averse to the pilot program or any measures that enhance affordability, but we would like included additional, broader affordability measures for all policy holders. Meaningful affordability safeguards are warranted, especially given that increasing weather volatility, sea level rise, and Risk Rating 2.0 will continue to exert upward pressures on premiums. 

Specifically, we would like to lower the annual cap of 18-25% increases. We have in the past supported legislation that would have capped annual increases to 10% (the SAFE-NFIP bill).  We would like to see a provision like that in the new bill– better yet, we would like to see a 5% increase cap.  Further, we would like to see this cap applied all policy holders and  across all properties irrespective of use (ie, primary home, secondary home, commercial building.) 

The bill also does not address significant issues like capping Write Your Own commissions, providing adequate mitigation funding for repetitive loss properties, or writing down the debt and reallocating the interest payments toward mitigation and premium reduction. Its provisions for better mapping, increasing ICC, and allowing policy holders that leave for NFIP for the private market to come back into NFIP without penalty are marginally better than what we have now.

The bill is facing some significant criticism from several Senators who don’t think the affordability provisions are robust enough.  Also, it’s not clear where the Senate is on a bill; the Banking Committee is not really all that engaged.

Lisa Tennyson and Commissioner Heather Carruthers have collaborated with County staff from Louisiana and National Association of Counties (NACO) to update NACO’s NFIP Resolution which will be presented at the NACO annual conference.

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