Louisiana was joined by nine other states in filing a federal lawsuit to challenge the recent overhaul of the National Flood Insurance Program (NFIP), arguing that the new system will lead to substantial rate increases for property owners.
The lawsuit was filed late last week in US District Court in New Orleans and names the Department of Homeland Security and the Federal Emergency Management Agency (FEMA) among its defendants.
Led by Louisiana Attorney General Jeff Landry, this legal action comes after changes to the NFIP were phased in starting in 2021 and became fully effective on April 1.
Referred to as Risk Rating 2.0, FEMA’s overhauled pricing system is meant to ensure that insurance rates accurately reflect an individual property’s risk. There has been plenty of pushback over these changes as some homeowners from coastal states report significant increases in their premiums.
According to the lawsuit, federal officials violated the Administrative Procedure Act by implementing changes that were “arbitrary and capricious.”
As such, it seeks an injunction against the new system and demands that the methodology and data used to determine pricing changes be disclosed.
Announcing the lawsuit during a press conference, Landry called Risk Rating 2.0 “a natural disaster of its own” and said that Louisiana has made “repeated calls for transparency, and repeated cries from our Congressional delegation.”
He also acknowledged the other states that have joined Louisiana in the suit, including Florida, Idaho, Kentucky, Mississippi, Montana, North Dakota, South Carolina, Texas, and Virginia.
FEMA has defended its new pricing system, stating on its website that the overhaul takes into account more variables that affect flooding.
According to the agency, rates under the new system are “actuarially sound, equitable, easier to understand, and better reflect a property's flood risk.”
In April, Secretary of Homeland Security Alejandro Mayorkas, whose department oversees FEMA, spoke of the changes in a congressional hearing and acknowledged that the new system needs more tweaking than initially expected.
“We are reviewing and need to continue to review the Risk Rating 2.0 given the concerns that have been expressed,” he said.
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