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Bill Includes Needed Changes To Help Consumers
Yesterday by a vote of 72 - 22, the U.S. Senate approvedthe "Homeowners Flood Insurance Affordability Act of 2014" (H.R. 3370) by Senator Bob Menendez (D-NJ) and Representative Michael Grimm (R-NY). Among other things the legislation would repeal Sec. 205's bought/sold provision and Sec. 207 (grandfather phase-out) of the Biggert-Waters Flood Insurance Reform Bill of 2012. Today's action in the Senate marks a MAJOR win for the Big "I", as mitigating the unintended harmful effects resulting from Sec. 207 and Sec. 205's "bought/sold" have been the association's top priorities for the last several months. Additionally, the Big "I" was the only major producer trade association to advocate in favor of this legislation.
The House passed H.R. 3370 on March 4 by an overwhelming, bipartisan vote of 306 - 91. All of Nebraska's Congressman voted for passage on March 4. With the Senate passage yesterday, the legislation is now awaiting President Obama's signature before it becomes law (which we expect in the next few days). Both Nebraska Senators voted against passage yesterday.
Below are some of the highlights of the legislation: Menendez-Grimm "Homeowner Insurance Affordability Act" Brief Highlights: * Property sales trigger (Sec. 205 "bought/sold") - Repeals the provision in Biggert-Waters that required homebuyers to pay the full-risk rate for pre-FIRM properties at the time of purchase. * Sec. 207 ("grandfathering") - Repeals Section 207 in Biggert-Waters that would have terminated grandfathering. * Retroactivity and Refunds - Requires FEMA to refund policyholders for overpaid premiums. * Annual premium surcharge - Imposes a $25 per policyholder per year ($250 per commercial policyholder) surcharge in order to pay for these reforms, which will be set aside in a NFIP reserve fund to pay future claims. * High deductible plans - increases the maximum deductible for single family residences (and 2-4 family buildings) to $10,000. * Monthly installment payments - authorizes FEMA to allow NFIP premium payments both monthly and annually. * Annual rate increase cap - Prevents FEMA from raising the average rates for a class of properties above 15% (18% for individual properties). Biggert-Waters set this rate at 20%. * Flood Insurance Advocate - Establishes a Flood Insurance Advocate within FEMA to answer current and prospective policyholder questions about the flood mapping process and flood insurance rates. * Affordability goal - puts in place a nonbinding goal for FEMA to minimize the number of policies with annual premiums that exceed one percent of the total coverage provided by the policy. * Mapping accuracy - Requires FEMA to certify in writing to Congress that it has implemented a flood mapping approach that results in technically credible flood hazard data in all areas where flood maps are used. * Notification of rate increases - Requires FEMA, at least 6 months prior to implementation of rate increases to make publicly available the rate tables and underwriting guidelines that provide the basis for the change. * Reimbursement for successful appeals - Allows FEMA to utilize the National Flood Insurance Fund to reimburse policyholders and communities that successfully appeal a map determination. The Big "I" will present at least one webinar later this spring for members outlining the practical impact of this legislation on independent agents, in addition to a special briefing at the IIABA Legislative Conference, April 9-11 in Washington, D.C. | 
