Thompson Takes to Floor to Call for Action to Protect Constituents from Dramatic Flood Insurance Rate Increases

January 9, 2014

WASHINGTON, D.C. – U.S. Representative Glenn ‘GT’ Thompson, PA-5, Wednesday joined with House colleagues in speaking out on the threat of failing to terminate dramatic rate increases under the Flood Insurance Reform Act of 2012. Thompson, an original cosponsor of the Homeowner Flood Insurance Affordability Act (H.R. 3370), a bill to terminate rate increases and enforce the Federal Emergency Management Agency’s (FEMA) failure to conduct the rate affordability study originally mandated under the law, discussed the impact of rate increases on 5th District residents and the need for passage of H.R. 3370.  The Special Order session was organized by Rep. Tom Marino, PA-10.

Remarks as prepared.

“I thank my good friend from Pennsylvania for hosting this Special Order this evening on a very serious issue.

As the commercial industry really exited the insuring of flood risk it was left to the federal government.  With the national flood insurance fund being decimated in recent years, and the need for a greater solvency in the program, the Biggert-Waters Act of 2012 was a piece of legislation we all had great hopes in as far as improving the National Flood Insurance Program.

Congress last year on a bipartisan basis passed the Flood Insurance Reform Act of 2012.

The measure included long-overdue reforms that strengthen the financial solvency and administrative efficiency of the program.

The rationale for the 2012 law was the need for the National Flood Insurance Program to more accurately reflect flood risk.

Historically, most low risk states subsidized higher risk, costal states. Similarly, low risk areas within states tended to subsidize those areas with higher risk, which were more prone to flooding.

The lynchpin of the 2012 law was to use true actuarial rates, in order to prevent very low risk areas from subsidizing moderate to high risk areas.

The unintended consequence has been drastic premium increases for those plans that were traditionally subsidized by the National Flood Insurance Program.

Under the law, Congress mandated that the Federal Emergency Management Agency complete an affordability study to further evaluate any unintended consequence as a result of the changes.

This study was to be completed before the rate increases went into effect, which was critical to understanding the full scope of the new risk model.  FEMA has failed to complete the affordability study that was required under the law.

Additionally, it remains a huge concern that FEMA does not have the data it needs to accurately determine risk under this new policy regime, and is incapable of creating a new mapping system that reflects true actuarial rates.

While eighty percent of policyholders will not see increases as a result of the new policy, a small portion of properties are being hit with staggering increases.

This is a serious concern for communities and individuals across the country, including many from the 5th district of Pennsylvania that I represent.

I’m an original cosponsor of the Homeowner Flood Insurance Affordability Act, a bill to terminate rate increases under the Flood Insurance Reform Act of 2012 until two years after the Federal Emergency Management (FEMA) completes the rate affordability study originally mandated under the law.

The bill also makes structural changes at FEMA to assure there is an advocate for homeowners when flood maps are drawn or adjusted.  

Mr. Speaker, improving the financial viability of the nation’s flood insurance program while ensuring that the program protects those it was designed to support is something every member of this body should support.  I yield back.”

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