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Learn the latest on flood insurance reform

CSFI Legislative Update – September 1, 2017

CSFI Stakeholders – 

We’re continuing to keep the people of Houston and Southwest Louisiana in our thoughts and prayers. As an organization that played a significant role in the recovery of Greater New Orleans post-Katrina, we’re connecting with our partners in Texas and Southwest Louisiana to provide assistance and share best practices.  Please do not hesitate to contact me if you or someone you know is in an impacted area and we can provide support and technical assistance. For some ways to support recovery efforts, please visit 

Yesterday, Chairman Hensarling proposed a three month extension of the NFIP, with the Ross-Castor legislation attached to ease private market re-entry. The article at the bottom of this email lays out the proposal.

A three month extension raises a number of concerns. Three months is simply not sufficient to give folks in the Houston area the stability and predictability they need to make a complete recovery. For context, just last week FEMA announced they were extending the deadline to file claims from last year’s flood event in Baton Rouge until this December, sixteen months later. The damage and destruction caused by Harvey is going to be much larger in scale, and it is reasonable to expect FEMA will again allow for extended periods for claims filing. The last thing folks dealing with this program need during their recovery is a lapse in authorization or instability with the program, and a three month scenario puts both of those things in to play. Equally important in terms of Harvey response is the unneeded and unnecessary distraction a three month extension would cause FEMA and NFIP management. Those management teams need to be absolutely and completely focused on helping the victims of the storm, not conferring, planning for implementation of a new program, attending Congressional hearings or otherwise doing anything except getting help to those suffering in South Texas and Louisiana.

We expect that Chairman Hensarling will continue to push his current package of reforms, which we still have concerns with, particularly sections 504 and 505. For example, section 504 will negatively impact the tens of thousands of Houstonians that already have one claim on their property and will file a second claim post Harvey, which will designate them as multiple loss properties and remove their grandfathering or pre-FIRM status, or any ability to grandfather in the future. It is in our best interest as a country to recognize that many flood prone communities are hubs of domestic energy production, international trade and finance, defense, agriculture, etc.  Affordable, sustainable flood insurance is an integral part of these communities’ ability to continue to provide their vital contributions to the American economy.

Given the Congressional calendar for the fall, it is unrealistic that we will come to any agreement on broader NFIP reforms if Chairman Hensarling’s package is the vehicle moving forward, and no one wants a short-sighted solution. Absent a longer term reauthorization, our options are: 

  • Another short term extension, which gives greater uncertainty 
  • A reform package that upends the program people are in the midst of dealing with (e.g. Section 504 of HR 2874)
  • A lapse in authorization 

Because it is imperative that people have certainty during recovery from Harvey, we need a minimum of a two year reauthorization of the NFIP to provide stability and predictability.

We have long advocated for reforms to the NFIP that will enhance mitigation, improve how we assess and communicate risk, and bring in additional premium revenue to the NFIP (in addition to affordability) and we’re not putting the need for those reforms on the back burner. But we need to reform the program in a way that stabilizes the NFIP for policyholders. Chairman Hensarling’s package won’t accomplish that.

If we could get some traction with one of the Senate options, that could be a game changer in terms of consensus on true reform that stabilizes the NFIP for both the taxpayer and the policyholder. 

As always, please let me know any questions.

Thanks –


Hensarling proposes 3-month extension for flood insurance program

By Zachary Warmbrodt

08/31/2017 04:44 PM EDT

House Financial Services Committee Chairman Jeb Hensarling is proposing a three-month extension of the National Flood Insurance Program that would include a bill intended to encourage greater private sector participation in the market.

“As he has said, a long-term reauthorization is what’s needed,” committee spokesman Jeff Emerson said. “But given the increasingly crowded calendar, needed reforms attached to a short-term extension makes sense.”

Emerson said Hensarling and Rep. Dennis Ross (R-Fla.), the author of the private insurance bill, H.R. 1422 (115), had spoken with each other about the proposal throughout the week.

A short-term extension with the bill included “presents the opportunity in a few months to do other reforms in connection with an increase in the NFIP’s borrowing authority,” he said.

Separately, Tom Bossert, President Donald Trump’s homeland security adviser, said Thursday that reforms to the program should be debated later in the fall.

“This administration’s been pretty clear that we’d like to see some responsible reforms to the National Flood Insurance Program,” Bossert said at a White House press briefing. “I don’t think now’s the time to debate those things as we need to help people that have pending claims. But we’ll debate that late fall here, as we come up with good policy ideas to help move that back into a risk-based, private sector, hopefully, supported solution.”

He said the Federal Emergency Management Agency has been “clear about how to do that and do it responsibly so as to not throw anybody off that’s on that current program.”

In terms of the immediate impact of Hurricane Harvey, Bossert said the flood insurance program had enough money to meet claims.

He said there was $8.6 billion to get through this round of claims and that it would “push us to the late fall, winter time frame when we have to get into discussing what the forecast projections are.”

Spokesmen for the White House and FEMA did not immediately respond to requests for comment on how Bossert derived the dollar amount and timeline.

FEMA has said it has $1.7 billion to pay claims and $5.8 billion left in its borrowing authority, not counting reinsurance. Hensarling said earlier this week there was a “great likelihood” that the program would have to seek an increase in the borrowing cap after Harvey.