Landrieu bill would delay, undo vital flood insurance reforms
Landrieu’s Strengthen, Modernize and Reform The National Flood Insurance Program Act proposes to delay or undo a number of reforms included in the Biggert-Waters Flood Insurance Reform Act, which passed Congress in June 2012. Both Landrieu and every other member of the Louisiana delegation voted in favor of the authorizing legislation.
Under Biggert-Waters, inadequate “grandfathered” flood insurance rates for second homes, business properties and properties that have been subject to severe repetitive losses are subject to rise until they reflect the true risks the properties face, with the increases phased in over a four-year period.
In addition, the law requires that when changes to flood maps prepared by the Federal Emergency Management Agency show that a property faces heightened flood risks or is newly included in a Special Flood Hazard Area, risk-based rates are phased in over a five-year period.
Landrieu’s bill would delay the start of the phase-in of risk-based rates for five years. It also would undo a provision of the law requiring that grandfathered rate subsidies end when a home is resold. To pay for the extended rate subsidies, Landrieu’s legislation would require that rates rise for the 80 percent of NFIP properties who do not receive subsidies.
“Passage of Biggert-Waters was a landmark statement by Congress that it was serious about addressing the inherent flaws of a program that puts people in harm’s way, encourages environmental degradation and wetlands depletion and that is nearly $30 billion in debt,” said R Street Senior Fellow R.J. Lehmann. “Congress took a measured approach to reform by phasing out the most indefensible subsidies and ensuring that any rate increases were modest and gradual.”
“Sen. Landrieu’s bill would undo all of the hard work and delicate compromises that went into a decade’s worth of consensus building in Congress,” Lehmann said. “More importantly, it represents a return to many of the bad policies that got the NFIP into the mess it currently faces.”