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Waters to FEMA: Flood Insurance Premiums Are a Top Concern of Mine

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Washington, DC, February 11, 2016 | comments

Congresswoman Maxine Waters, Ranking Member of the House Financial Services Committee, sent a letter to Craig Fugate, Administrator of the Federal Emergency Management Agency (FEMA), urging him to provide Congress a robust affordability framework in a timely manner so that proposals can be considered ahead of the 2017 reauthorization of the National Flood Insurance Program (NFIP).

Ranking Member Waters’ letter comes as the National Academy of Sciences (NAS) recently completed its affordability study mandated by Congress in the Biggert-Waters Flood Insurance Reform Act of 2012 and amended by the Homeowners Flood Insurance Affordability Act of 2014 (HFIAA). In the letter, Waters writes that Congressional action has made “abundantly clear that addressing affordability is to be a top priority of the NFIP. The statute requires that the framework submitted to Congress include substantive proposals for addressing affordability.”

“While I understand that there are some significant gaps in data that restrict FEMA’s ability to concretely assess the effects of different approaches to addressing affordability, I urge you to prioritize addressing these shortcomings in the following months so that the forthcoming affordability framework can include substantive programmatic and regulatory changes to address affordability in accordance with the statutory mandate,” the letter continues.

The full text of the letter is below.

Administrator W. Craig Fugate
Federal Emergency Management Agency
U.S. Department of Homeland Security
500 C Street, SW
Washington, DC 20472

Dear Administrator Fugate:

The House Financial Services Committee’s Subcommittee on Housing and Insurance began 2016 with two hearings, examining the National Flood Insurance Program (NFIP). As Congress continues to consider possible reforms of the NFIP in anticipation of the need for reauthorization in 2017, affordability of flood insurance premiums is a top concern of mine. As such, I am looking forward to FEMA’s release of the statutorily mandated affordability framework to provide Congress with the information it needs to properly assess the options available, and to ultimately enact legislative changes that will put us on a path towards a more equitable and efficient means of ensuring affordable premiums.

As you know, the National Academy of Sciences (NAS) has recently completed its work on the affordability study, which was mandated by Congress in the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act). Specifically, the Biggert- Waters Act required FEMA to come up with “an economic analysis of the costs and benefits to the Federal government of a flood insurance program with full risk based premiums, combined with means-tested Federal assistance to aid individuals who cannot afford coverage, through an insurance voucher program.” The Homeowners Flood Insurance Affordability Act of 2014 (HFIAA), also significantly increased the funding for this study and extended the deadline for its submission to ensure a robust analysis was completed on this important subject. Further, HFIAA required that within 18 months from the submission of the NAS study, FEMA must submit an affordability framework that “proposes to address, via programmatic and regulatory changes, the issues of affordability of flood insurance sold under the [NFIP],” including issues identified by the NAS study.

After reviewing the two-part study from NAS, which identified a number of gaps in data that might hinder FEMA’s ability to appropriately assess affordability solutions, I am concerned about the outlook for an effective affordability framework. The Congressional action highlighted above makes abundantly clear that addressing affordability is to be a top priority of the NFIP. The statute requires that the framework submitted to Congress include substantive proposals for addressing affordability. While I understand that there are some significant gaps in data that restrict FEMA’s ability to concretely assess the effects of different approaches to addressing affordability, I urge you to prioritize addressing these shortcomings in the following months so that the forthcoming affordability framework can include substantive programmatic and regulatory changes to address affordability in accordance with the statutory mandate.

It is critical that Congress receive a robust affordability framework in a timely manner so that proposals can be considered ahead of the 2017 reauthorization. I appreciate your thoughtful consideration of this important issue, and I respectfully request that you respond to this letter by February 25, 2016 with the expected release date of the affordability study. I would also appreciate periodic updates from your staff on FEMA’s progress, including a description of any additional input that you are seeking.

If you have any questions about this letter, please contact my staff.


Sincerely,


Maxine Waters
Ranking Member

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