House takes action on flood rate delays

House takes action on flood rate delays | Insurance Business America

House takes action on flood rate delays
Contrary to expectations, House Republican leadership signaled Thursday it would allow a vote delaying sky-high flood insurance rate hikes set to impact home and business owners this October.

However, rather than considering the legislation passed by the Senate last month, the chamber will put forward its own legislation addressing the premium hikes. In the House bill, rate increases across the board would be gradual, limited to no more than 15% annually. Those who have already been affected by premium hikes would be eligible for refunds for insurance bills already paid.

Conversely, the Senate bill would delay rate hikes altogether until Sept. 30, 2017—the date current National Flood Insurance Program authorization sunsets.

Majority Leader Eric Cantor announced the House’s decision, and said a vote on flood insurance legislation would take place after Congress returns from holiday Feb. 24.

Previously, House Speaker John Boehner indicated the chamber would not take up the flood insurance issue out of a desire to stabilize the floundering National Flood Insurance Program—still in debt following Hurricane Katrina.

Producers with clients in affected areas have been scrambling to do anything they can to help decrease premiums barely affordable to home and business owners. However, Gretna, La-based Sean Johnson said there is only so much they can do.

“Once a person’s been affected, there’s very little that can be done. There is only so much fat you can trim off these things,” Johnson said. “The agents are left feeling helpless.”

Not all players in the insurance industry would greet a flood insurance delay with gratitude, however. The National Association of Mutual Insurance Companies has stood in opposition to any delays to Biggert-Waters, the current legislation guiding rate increases.

“We remain in full support of reforms to the NFIP made by the Biggert-Waters Act and oppose any effort to delay or roll back pieces of the legislation,” NAMIC Senior Vice President Jimi Grande said in October.

Instead, NAMIC supports means-tested subsidies for policyholders who can’t afford premium increases.

Without Congressional delay, roughly 20% of the nation’s 5mn policyholders are likely to see rate increases of up to 1,000% and even 3,000%