Cassidy Announces New Flood Insurance Legislation

Press Release

Today, Congressman Bill Cassidy, M.D. announced new legislation providing comprehensive reform and longer-term relief from skyrocketing premiums within the National Flood Insurance Program (NFIP). The legislation is the result of a collaborative effort with Rep. Michael Grimm (R-NY) and other House Members from Louisiana, Florida, New Jersey, Mississippi, West Virginia and around the country. It incorporates bi-partisan solutions that help make flood insurance more affordable without jeopardizing the financial solvency of the NFIP. Dr. Cassidy advocated for many of the reforms within this legislation, including the insertion of a key provision that permanently reinstates grandfathered flood insurance rates. He released the following statement:

"This legislation is important for Louisiana, and I am proud to have worked with Michael Grimm of New York and members of the Louisiana and other Congressional delegations to produce this bold legislation that provides immediate relief. It permanently reinstates grandfathered flood insurance rates and protects those who built their homes to code. It also helps stabilize our real estate market, so home buyers don't face large flood insurance premiums after buying a home. Louisiana families facing big flood insurance rate hikes need this legislation, and I will work for its passage."

The legislation does not add to our national deficit and builds upon the Cassidy Amendment, which became law in January and delays grandfathered flood insurance rate increases through at least late next year and possibly through April 2016. The rate increases are caused by the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12). The House legislation provides relief through several measures, specifically:

1. Repealing section 207 of BW-12 and reinstating grandfathering permanently. This means catastrophic rate increases will not occur because of FEMA remapping.

2. Repealing home sale/new policy rate increase triggers (in Section 205) so the person buying the home is treated the same as the person selling it.

3. Providing a retroactive refund for people who already realized huge increases due to the sale/purchase of a home.

The House bill also helps strengthen the fiscal solvency of the NFIP by fully paying for its relief provisions. This is done through a small annual assessment dedicated to build up the NFIP reserve fund, which is currently inadequate to handle future storms like Hurricanes Katrina and Sandy.

The House bill also includes generally accepted affordability measures such as: high deductible options, map certification, flood protection funding recognition, exceptions on escrow requirements, and optional monthly installment plans. The bill lifts the funding cap on the affordability study and accelerates its completion.

This bill is a strong step forward in balancing flood insurance accessibility and solvency with consumer affordability. The text of the legislation is available here and a summary document can be read here.

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