Measure Would Give Policyholders Options in New FEMA Risk Rating 2.0 Flood Insurance Rate Scheme

WASHINGTON, D.C. – U.S. Senator Cindy Hyde-Smith (R-Miss.) today introduced legislation to give policyholders more options as the Federal Emergency Management Agency (FEMA) prepares for a nationwide implementation of its new National Flood Insurance Program (NFIP) premium rate structure this week.

The Homeowner Flood Insurance Transparency and Protection Act would allow NFIP policyholders to retain existing premium rates rather than being forced into new NFIP Risk Rating 2.0 (RR2.0) rates until FEMA meets certain accountability and transparency requirements.

“FEMA is charging full force to impose Risk Rating 2.0 no matter the consequences.  This legislation would protect homeowners and the overall health of the NFIP while FEMA responds to outstanding bipartisan concerns and questions about the methodology and rollout of this program,” Hyde-Smith said.  “Policyholders deserve to know how much they are going to be paying over the full course of this program and why, especially during a time of record inflation and gas prices.”

FEMA is on course to fully implement RR2.0 nationwide on Friday, April 1.  It started the RR2.0 rollout in October despite warnings that it will increase premium costs for almost 80 percent of policyholders and that price increases could drive as many as 900,000 of them to cancel flood insurance coverage—including an estimated 60,000 in Mississippi.

The legislation (S.3934) is intended to protect policyholders while forcing FEMA to address concerns that it developed RR2.0 without adhering to statutes requiring:

  • Public notice and comment
  • Established policyholder premium appeals process
  • Economic impact analysis
  • Independent peer review
  • Assurance of data reliability

U.S. Senators Roger Wicker (R-Miss.), Bill Cassidy, M.D. (R-La.), John Kennedy (R-La.), and Marco Rubio (R-Fla.) are original cosponsors.

“Many Mississippi communities are at risk of flooding and rely on the National Flood Insurance Program as a lifeline.  I have heard from residents across the state that they are concerned about rising flood insurance premium rates under FEMA’s new Risk Rating 2.0 system. Mississippians should not be penalized with high insurance rates calculated under FEMA’s bureaucratic process, Wicker said.  “I am proud to join Senator Hyde-Smith and our Senate colleagues to introduce this bill which would provide the transparency our state needs to see from FEMA.”

“FEMA needs to be honest with the American people about rising premiums and changes to NFIP,” said Dr. Cassidy.  “This bill would prevent FEMA from mandating Risk Rating 2.0 until they get their act together.”

“Despite my repeated warnings, the Biden Administration is going full steam ahead with implementing Risk Rating 2.0.  As a result, the majority of policyholders will see rate increases this week,” Rubio said.  “At the very least, homeowners deserve transparency with regard to the rate hikes – which is exactly what this legislation would provide.”

Click here for a summary of S.3934.