House Financial Services, House Homeland Security, and Senate Banking Committees Address NFIP in Respective Hearings
On April 19, the House Committee on Homeland Security held a budget hearing to review the Biden Administration’s Fiscal Year 2024 proposal for the Department of Homeland Security. Alejandro Mayorkas, Secretary of Homeland Security, provided testimony. In response to Congressional concerns around Risk Rating 2.0, Secretary Mayorkas responded, “We are reviewing and need to continue to review the Risk Rating 2.0 given the concerns that have been expressed.” The Advocate, Insurance Business Magazine, and Government Technology covered this commentary.
On April 28, the House Committee on Financial Services Housing and Insurance Subcommittee held a second hearing on NFIP, “The Reauthorization of the National Flood Insurance Program: FEMA’s Perspective.” This follows their March 20 hearing on NFIP participation. FEMA’s Assistant Administrator David Maurstad was the hearing’s sole witness. In his testimony, Maurstad presented FEMA’s 17 legislative proposal for NFIP reform, as submitted to the 117th Congress. CSFI’s top reauthorization priorities, including debt forgiveness and a means-tested affordability program, largely align with FEMA and/or Congressional priorities communicated at this hearing.
Committee members posed questions on NFIP administration, NFIP reauthorization, and Risk Rating 2.0 to Maurstad throughout the hearing. Representative Bill Posey (R-FL), Representative Andrew Garbarino (R-NY), and Representative Ritchie Torres (D-NY) pressed Maurstad on FEMA’s limited transparency in the Risk Rating 2.0 methodology, which is already impacting their constituents. Maurstad also discussed a forthcoming Government Accountability Office (GAO) report on Risk Rating 2.0.
On May 2, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing on “Reauthorization of the National Flood Insurance Program: Improving Community Resilience.” Witnesses were flood insurance experts – Dr. Carolyn Kousky, Associate Vice President for Economics and Policy, Environmental Defense Fund; Mr. Roy Wright, President & CEO, Insurance Institute for Business & Home Safety; and Ms. Patty Hernandez, Executive Director, Headwaters Economics.
Dr. Kousky reiterated the need for a means-tested affordability program and the preeminent solution of lowering insurance costs by lowering underlying risk. Senator John Kennedy (R-LA) questioned Roy Wright, former FEMA Deputy Associate Administrator, about his opinion on Risk Rating 2.0 and FEMA’s transparency. Wright affirmed that, although risks and associated premiums are growing, FEMA should be transparent in their insurance calculations, and they should be “showing the pieces.”