Reintroduces Bill to Create Options for Policyholders as Higher FEMA Flood Insurance Premiums Kick In

WASHINGTON, D.C. – U.S. Senator Cindy Hyde-Smith (R-Miss.) today reintroduced her legislation to protect policyholders from higher National Flood Insurance Program premiums until the Federal Emergency Management Agency (FEMA) meets certain accountability and transparency requirements.

The Homeowner Flood Insurance Transparency and Protection Act (S.721) would allow policyholders to retain previous NFIP premium rates rather than the higher rates associated with FEMA implementing the NFIP Risk Rating 2.0 (RR2.0).  Despite widespread concerns about how FEMA developed RR2.0, the agency launched full implementation of the reforms in April 2022.

“The effects of RR2.0 on the pocketbooks of flood insurance policyholders have only deepened a sense of mistrust in just how FEMA derived the new premium rates.  FEMA still needs to come clean on the methodology it is using in this major change to the National Flood Insurance Program, and my legislation would force them to answer our concerns,” Hyde-Smith said.  

FEMA started its RR2.0 rollout in October 2021 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.  According to FEMA, Mississippi, Louisiana, and Texas are among the states that will have at least 80 percent of policyholders paying more in premiums—84 percent in Mississippi’s case.

S.721 would 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 John Kennedy (R-La.), Ted Cruz (R-Texas), and Bill Cassidy, M.D. (R-La.).

Read a summary of the bill here.