Oct 28 U.S. House and Senate members have
reached a bipartisan agreement to delay by at least four years a
flood insurance rate hike that would impact more than a million
homeowners, according to congressional sources.
The agreement would require the Federal Emergency Management
Agency (FEMA) to complete an affordability study before
increasing future flood insurance premiums, according to a copy
of the draft legislation obtained by Reuters.
Legislation delaying the policy increases is due to be filed
in the Senate on Tuesday, according to congressional sources.
"Because lawmakers on both sides of the political aisle and
both legislative chambers have agreed, it's anticipated their
legislation could pass quickly," said Ryan Brown, a spokesman
for Democratic Senator Bill Nelson of Florida, one of the most
Nelson said the deal was crafted with Representative Maxine
Waters, a California Democrat and one of the original
co-sponsors of the 2012 Biggert-Waters Flood Insurance Reform
Act that forced up premiums.
Among Republican Senators reportedly supporting the deal are
Johnny Isakson of Georgia, Thad Cochran of Mississippi, and
David Vitter of Louisiana, according to Insurance Journal.
Reuters was not immediately able to confirm their support.
Congress passed the Biggert-Waters Act in July 2012 with
strong bipartisan support just months before Superstorm Sandy
struck the northeastern coast in late October, in an effort to
balance a $24 billion deficit in the National Flood Insurance
Program, which had growing losses from Hurricane Katrina in New
Orleans in 2005 and earlier disasters.
The rate hike is designed to make property owners pay for
the true risk of living in high flood hazard areas, including
coastal areas of Florida, New Jersey, New York, Texas and
Louisiana, and inland states prone to river flooding.
The hike potentially impacted a million homeowners living in
older houses along the coastlines and riverbanks of the United
States, with the annual flood insurance premium on some homes
set to jump tenfold over the next few years.
The Biggert-Waters Act requires FEMA to phase out insurance
subsidies enjoyed for decades by owners of homes that were built
in high-risk flood zones before the creation of the original
federal flood insurance rate maps and building standards, which
in most communities occurred in the 1970s and 1980s.
Critics of subsidized federal flood insurance say the
benefits disproportionately favor high-risk and wealthy
"Delaying the scheduled phase-out of flood insurance premium
subsidies amounts to a gift to mostly wealthy homeowners who get
to enjoy cheap insurance on their beach homes thanks to taxpayer
support," R.J. Lehmann, a senior fellow with R Street, a free
market think tank, said in a statement.
FEMA Director Craig Fugate told a September hearing of the
U.S. Senate Banking, Housing and Urban Affairs Committee that
the act unfairly hit middle-class homeowners who had not been
(Reporting by David Adams in Miami; Editing by Lisa Shumaker)