WASHINGTON – U.S. Senator Bill Cassidy, M.D. (R-LA) helped organize a U.S. Senate Banking Committee hearing on reauthorizing and reforming the National Flood Insurance Program (NFIP) yesterday to highlight the urgent need for Congress to act. Cassidy also introduced Greater New Orleans (GNO), Inc. President Michael Hecht as one of the witnesses. Cassidy worked with the Committee Chairman, Senator Sherrod Brown (D-OH), to schedule the hearing and secure Hecht an opportunity to testify.
“NFIP’s new risk assessment policy called Risk Rating 2.0 has made flood insurance simply impossible to afford,” said Dr. Cassidy. “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 testified that Risk Rating 2.0 has led to skyrocketing premiums and that allowing the program to expire would be catastrophic for policy holders.
“A lapse is something we cannot allow to happen,” said Hecht. “The benefit that NFIP provides to our nation is great.”
Hecht went on to clarify that homeowners who rely on NFIP “are often mischaracterized as being wealthy homeowners who are subsidizing their beachfront homes. This is just empirically, statistically not the case.”
Hecht highlighted a study that GNO published finding that 98.5% of policy holders are in counties with a median household income of less than $100,000 per year and that 62% are in area with an annual income below the national average.
“The reality is that the NFIP Program is about allowing the working coast and rivering parts of America to keep working,” said Hecht. “If our workers cannot live there, this is going to have impacts on our ability to supply America and the world with food.”
Background
Last year, Cassidy reintroduced his National Flood Insurance Program Reauthorization Act to reauthorize the program for five years, providing greater stability for homeowners, small business owners, and the real estate market as the nation continues to struggle with inflationary pressures. The bill would also implement a series of sweeping reforms to reduce costs, make generational investments in communities to reduce flood risk, and establish a fairer claims process for policyholders. He participated in a roundtable hosted by GNO, Inc. and the Coalition for Sustainable Flood Insurance before introducing the bill to hear from community leaders and advocates on the issue.
Cassidy also traveled St. Bernard Parish last August to talk with residents about their flood insurance premiums, resulting in the second episode of his series Bill on the Hill.
Last February, Cassidy delivered a speech on the U.S. Senate floor demanding the Biden administration halt massive hikes to National Flood Insurance Program premiums caused by Risk Rating 2.0. He continues to call out President Biden – who can stop the implementation of Risk Rating 2.0 with the stroke of his pen.
The NFIP-RE Act of 2023 has been met with an outpouring of support including New Orleans Chamber of Commerce President and CEO Sandra Lindquist, Baton Rouge Area Chamber President and CEO Adam Knapp, Home Builders Association of Greater Baton Rouge President and CEO Karen Zito, Greater New Orleans, Inc. President and CEO Michael Hecht, Restore and Retreat Executive Director and State Representative Joseph Orgeron, Lafourche Parish President Hon. Archie Chaisson, III, St. Tammany Corporation CEO Chris Masingill, Terrebonne Levee and Conservation District President Tony Alford, Northshore Home Builders Association Executive Officer Amy Ybarzabal, and National Association of Counties Executive Director Matthew Chase. Here’s what people are saying.
In February 2022, FEMA publicly acknowledged an internal study finding that the implementation of Risk Rating 2.0 to the National Flood Insurance Program (NFIP) could cause 20% of policyholders to drop out of the program due to skyrocketing premiums. Learn more here.
###