Nov 21, 2013
Association submits testimony to Congress calling for modifications to Biggert-Waters.
The Big “I” remains on the forefront of efforts to preserve and improve the National Flood Insurance Program (NFIP), which protects millions of homes and businesses across America. On Tuesday, the Big “I” submitted testimony in a U.S. House of Representatives hearing, “Implementation of the Biggert-Waters Flood Insurance Act of 2012: Protecting Taxpayers and Homeowners.”
After a multi-year lobbying effort by the Big “I” and others, Biggert-Waters was signed into law late last year, extending the NFIP until 2017 and bringing much-needed reforms to the program.
Despite the good intentions of the law and its authors, significant problems accompany its implementation. Throughout implementation, consumers, bankers, realtors, homebuilders and insurance agents have expressed widespread concern over two specific elements and their impact on NFIP premiums for many policyholders. The Big “I” recommends congressional action to make minor modifications to the new law, in order to ensure that the program works for policyholders while still protecting taxpayers.
The Big “I” testimony outlines the reasons why the association supports the NFIP, as well as the Biggert-Waters legislation that modernized the program and shored up its finances to better protect consumers in the future. It goes on to explain why the Big “I” supports updates to the new law, particularly in Section 205 regarding properties bought and sold and in Section 207. The testimony then closes by suggesting possible changes to ensure that Biggert-Waters continues to steer the NFIP toward financial stability while also protecting consumers.
Section 205 phases out explicit subsidies for second/vacation homes; commercial properties; severe repetitive loss properties; properties undergoing substantial improvement; and properties experiencing substantial flood damage and rebuild. It immediately eliminates all subsidies, with no phase-out, for properties bought and sold, and stops “grandfathering” of policies located in communities with a new or redrawn map.
Regarding Section 205, the association noted in its testimony that “the Big ‘I’ is concerned about the impact that the bought/sold provision of Section 205 will have on individual consumers as well as the broader U.S. housing market.”
Additionally, “the Big ‘I’ has major concerns regarding the elimination of the ‘grandfather’ process via Section 207. The fact is that this provision will end up punishing good actors, those responsible homeowners that built or purchased homes in compliance with the known risks at the time, took responsible steps towards mitigation based upon the government maps in existence, and kept active NFIP policies.”
The full text of the Big “I” testimony, which was submitted for the record, and more information about the hearing are available online.
John Prible is Big “I” vice president of federal government affairs.
Margarita Tapia is Big “I” director of public affairs.
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