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Federal Government

Posted on: June 29, 2023

Congress Moves to Reauthorize National Flood Insurance Program

The National Flood Insurance Program Reauthorization (NFIP-RE) Act of 2023 (H.R.4349/S.2142) has been introduced in both the House and Senate with bipartisan support in both chambers. 

The National Flood Insurance Program Reauthorization (NFIP Re) Act of 2023 aims to provide long-term certainty and stability to the National Flood Insurance Program (NFIP). By reauthorizing the NFIP for five years, the act ensures that communities relying on flood insurance can have confidence in its availability and functionality. The legislation is consistent with the League’s 2022-06 Conference Resolution Advocating for Long-Term NFIP Reauthorization

One of the key provisions of the act is the protection it offers to policyholders against steep rate hikes. With Federal Emergency Management Agency’s (FEMA) current premium rating methodology, known as Risk Rating 2.0, many policyholders have experienced significant increases in their flood insurance rates. This has prompted some to leave the NFIP altogether. To avoid a repeat of the negative consequences seen after the implementation of the Biggert-Waters Act of 2012, which caused costs to skyrocket and disrupted the real estate market, the NFIP Reauthorization Act of 2023 places a cap on annual premium increases at 9%.

Recognizing the importance of affordability, particularly for low- and middle-income policyholders, the act introduces means-tested vouchers to alleviate the burden of flood insurance premiums. This provision aims to ensure that flood insurance remains accessible and affordable for those who need it most. Furthermore, the act freezes interest payments on the NFIP debt and redirects the resulting savings toward cost-saving mitigation efforts. This approach not only helps restore the program’s solvency, but also emphasizes the importance of investing in measures that can reduce the impact of flooding in the long run.

The act also addresses the issue of private insurance company profits by placing limits on compensation through the Write Your Own (WYO) program. By capping WYO compensation at the rate FEMA pays to service its own policies, the act redirects the savings toward funding the means-tested affordability program.  

Recognizing the importance of proactive mitigation in reducing flood risk, the act increases the maximum limit for Increased Cost of Compliance (ICC) coverage. The ICC coverage reflects the costs associated with rebuilding and implementing mitigation projects, encouraging policyholders to take necessary steps to mitigate flood damage. 

To improve flood risk assessment, the act increases funding for FEMA’s flood mapping program. The utilization of Light Detection and Ranging (LiDAR) technology enhances the accuracy of flood risk mapping across the country.  

Recognizing the need for oversight and accountability, the act introduces new measures to monitor insurance companies and vendors involved in the NFIP. It grants FEMA greater authority to terminate contractors that have a history of abuse. Additionally, the Act incorporates lessons learned from previous disasters, such as Superstorm Sandy, to reform the claims and appeals process. This includes banning aggressive legal tactics, setting strict deadlines for FEMA to provide quick and fair payments, and eliminating FEMA’s reliance on expensive for-profit legal entities.

New Jersey Senator Bob Menendez is leading the effort in the Senate and New Jersey Representative Frank Pallone is leading the effort in the House. Additional New Jersey co-sponsors include Senator Cory Booker, Representatives Bonnie Watson Coleman, Donald Payne, Donald Norcross, Andy Kim, Tom Kean, Mikie Sherrill, Josh Gottheimer, Robert Menendez, and Jefferson Van Drew. 

Sponsors from other states include Senator Bill Cassidy (R-LA), John Kennedy (R-LA), Cindy Hyde-Smith (R-MS), Kristen Gillibrand (D-NY), Chris Van Hollen (D-MD), Roger Wicker (R-MS), and Marco Rubio (R-FL). In the House current co-sponsors include Representatives Clay Higgins (R-LA) and Troy Carter (D-LA). 

The NFIP Reauthorization Act of 2023 is a comprehensive piece of legislation that addresses various aspects of the flood insurance program. By tackling issues such as rate hikes, affordability, solvency, mitigation, mapping accuracy, oversight, and claims process reforms, the act aims to create a more stable and effective flood insurance program that can better serve communities at risk of flooding.

We will continue to monitor legislative progress and report back accordingly.

Contact: Paul Penna, Senior Legislative Analyst,, 609-695-3481, x110.


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