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Rep. Maxine Waters rolls out aggressive national flood insurance repair program
Housing Wire - October 28, 2013

Congresswoman Maxine Waters, D-Calif., introduced an aggressive bipartisan plan to fix the National Flood Insurance Program this past week.

Her new plan delays potential rate increases up to four years, while giving lawmakers time to obtain an affordability study from FEMA and to address lingering issues raised by the Biggert-Waters Flood Insurance Reform Act.

Waters noted that the Biggert-Waters Act brought many "unintended consequences." Her new legislation is designed to remedy those issues.

Rep. Waters said the bipartisan deal reached consensus after much back and forth over the future of the NFIP and rate increases to offset costs.

"Over the past several months, I have felt the harm and heartache that many Americans have already experienced as a result of changes to the National Flood Insurance Program. From the start, I have made clear that I would lead the effort to fix the unintended consequences of the Biggert-Waters Flood Insurance Reform Act," said Congresswoman Maxine Waters.

The legislation scheduled to be released next week in the House and Senate is expected to delay rate increases for two years once FEMA is able to finalize an affordability study.

Given the time required for this study, it is likely it could take up to four years before rate increases are allowed under Waters new plan.

The proposed legislation also stipulates that FEMA has to propose regulations that will addresses affordability issues that surface within 18 months after completion of the study while establishing a six-month moratorium for Congressional review.

The delay would apply to primary, non-repetitive loss residences grandfathered in, all properties sold after July 6, 2012, and property owners that purchased insurance coverage after July 6, 2012.

The legislation also would let FEMA reimburse policyholders using National Flood Insurance Funds, while eliminating the 50% cap on state and local contributions to levee construction and reconstruction.

The law also protects the so-called basement exception, which lets the lowest ‘proofed opening’ in a house to be the barometer for setting flood insurance rates.

Waters plan also establishes a flood insurance rate map advocate within FEMA to answer policyholder questions and requires FEMA to certify that an agency has fully adopted a risk-based approach to analyzing flood risk.