Central Louisiana News

WASHINGTON - A Senate Banking Committee hearing on reauthorizing and reforming the National Flood Insurance Program (NFIP) was held yesterday, with U.S. Senator Bill Cassidy, M.D. (R-LA) playing a key role in organizing the event. The hearing aimed to emphasize the pressing need for action from Congress. Cassidy worked closely with Committee Chairman Senator Sherrod Brown (D-OH) to schedule the hearing and provide a platform for witnesses to testify.

One of the witnesses at the hearing was Michael Hecht, President of Greater New Orleans (GNO), Inc. Cassidy introduced Hecht and highlighted the detrimental impact of NFIP's new risk assessment policy, known as Risk Rating 2.0. Cassidy stated, "NFIP’s new risk assessment policy called Risk Rating 2.0 has made flood insurance simply impossible to afford. At this point, we know we are in an actuarial death spiral, where people will be dropping insurance because they can no longer afford it."

Hecht echoed Cassidy's concerns, emphasizing that Risk Rating 2.0 has resulted in skyrocketing premiums. He warned against allowing the program to expire, stating, "A lapse is something we cannot allow to happen. The benefit that NFIP provides to our nation is great." Hecht also debunked the misconception that NFIP primarily benefits wealthy homeowners, stating, "The reality is that the NFIP Program is about allowing the working coast and rivering parts of America to keep working."

Hecht cited a study published by GNO, Inc., which found that 98.5% of NFIP policyholders are in counties with a median household income of less than $100,000 per year. He further highlighted that 62% of policyholders are in areas with an annual income below the national average. Hecht emphasized the importance of the program in supporting workers in coastal and riverine regions, stating, "If our workers cannot live there, this is going to have impacts on our ability to supply America and the world with food."

Cassidy has been actively advocating for flood insurance reform. Last year, he reintroduced his National Flood Insurance Program Reauthorization Act, which aims to provide stability for homeowners, small business owners, and the real estate market. The bill also includes reforms to reduce costs, invest in communities to reduce flood risk, and establish a fairer claims process for policyholders.

Cassidy's efforts have garnered support from various organizations and individuals. Sandra Lindquist, President and CEO of the New Orleans Chamber of Commerce, Adam Knapp, President and CEO of the Baton Rouge Area Chamber, and Karen Zito, President and CEO of the Home Builders Association of Greater Baton Rouge, have all expressed their support for Cassidy's bill.

In February 2022, FEMA acknowledged the potential consequences of Risk Rating 2.0, with an internal study suggesting that 20% of policyholders could drop out of the NFIP due to the significant increase in premiums.

The Senate hearing organized by Cassidy underscores the urgent need for Congress to address the challenges facing the National Flood Insurance Program. With rising premiums and the risk of policyholders dropping their coverage, it is crucial for lawmakers to act swiftly to reauthorize and reform the program. Cassidy's proposed legislation offers a comprehensive approach to tackle these issues and ensure the program's sustainability for the benefit of homeowners, businesses, and communities across the nation.