Van Hollen, Menendez, Kennedy, Rubio, Warren, Cochran Lead Bipartisan Flood Insurance Reform Bill

U.S. Senator Chris Van Hollen (D-Md.), along with Senators Bob Menendez (D-N.J.), John Kennedy (R-La.), Marco Rubio (R-Fla.), Elizabeth Warren (D-Mass.), and Thad Cochran (R-Miss.), today introduced comprehensive, bipartisan legislation to extend the National Flood Insurance Program (NFIP) for six years while instituting a series of sweeping reforms to address the waste, abuse and mismanagement plaguing the system. The Senators are members of the Senate Banking and Appropriations Committees, which oversee the NFIP. Sens. Cory Booker (D-N.J) and Bill Nelson (D-Fla.) have signed on as original cosponsors.

At an event today to announce the legislation, Senator Van Hollen discussed recent flooding in Ellicott City, Maryland, and elsewhere across the state and pushed for reforms to improve flood insurance for both homeowners and business owners. Video of his remarks is available here.

The Sustainable, Affordable, Fair, and Efficient (SAFE) National Flood Insurance Program Reauthorization Act of 2017 tackles systemic problems with flood insurance, puts it back on solid fiscal ground, and reframes the nation's entire disaster paradigm to one that focuses more on prevention and mitigation to spare the high cost of rebuilding after flood disasters. Congress must reauthorize the NFIP, which expires on Sept. 30, 2017.

"From Ellicott City to the Eastern Shore, flooding impacts communities across Maryland," said Sen. Van Hollen, who sits on both the Senate Banking and Appropriations Committees. "We need to reform the National Flood Insurance Program to ensure that families and businesses have the affordable coverage they need, our flood maps are based on the most update-to-date science, and the NFIP program has long-term stability for communities across the country."

"Americans deserve a National Flood Insurance Program that is sustainable for taxpayers, affordable for homeowners, and accountable to everyone," said Sen. Menendez, a senior member of the Senate Banking Committee and chair of the Sandy Task Force. "If we want a more sustainable system, the answer isn't to slam homeowners with even higher premiums. This legislation puts the lessons we learned after Superstorm Sandy into action, levels the playing field for policyholders, and attacks the NFIP's rampant waste and abuse to create real savings and greater investment in mitigation and resiliency efforts to make our residents and communities safer."

"More than five million Americans depend on this vital program to protect their homes and businesses. This is an essential program, not just for Louisiana, but for the entire U.S," said Sen. Kennedy, who sits on both the Senate Banking and Appropriations Committees. "We have to ensure that families and businesses in flood-prone areas are protected. This bill will reauthorize the National Flood Insurance Program while making common sense reforms to maintain its solvency."

"The National Flood Insurance Program is vitally important to my home state of Florida, which is a major contributor to the system," said Sen. Rubio, a member of the Senate Appropriations Committee. "This bill helps ensure long-term stability, while providing much needed reforms to protect the program's policyholders. It is past time for the federal government to take a more proactive approach in addressing the underlying risk affecting flood prone communities. I am proud to have worked with this bipartisan group to make our National Flood Insurance Program more viable, sustainable and accountable."

"It's time to come together to pass a long-term, bipartisan NFIP reauthorization that makes much-needed reforms to the flood insurance program," said Sen. Warren, a member of the Senate Banking Committee. "Our bill will make changes that extend affordable flood insurance protection to everyone who needs it and that places more emphasis on better flood mapping, prevention, and resiliency."

"Policyholders in Mississippi and around the country know the National Flood Insurance Program needs to be reformed. This legislation is a solid starting point to make the program more affordable and accountable. We want to return emphasis on flood control infrastructure, and fully recognize the physical and financial protections gained from these cost-shared investments," said Sen. Cochran, chairman of the Senate Appropriations Committee. "I look forward to working to pass bipartisan reforms that offer better flood protection and more effective coverage for homeowners, businesses, and communities."

SAFE NFIP addresses critical problems with the program, administered by the Federal Emergency Management Agency (FEMA), following Superstorm Sandy and other disasters: unsustainability, low participation rates, inaccurate flood maps, indifference to the benefits of flood control infrastructure, agency mismanagement, unsustainable debt service costs and contractor profiteering.

Sens. Menendez, Kennedy, Van Hollen, Rubio, Warren and Cochran laid out their shared, bipartisan framework for reform in an op-ed they penned for the Wall Street Journal.

The Sustainable, Affordable, Fair, and Efficient (SAFE)
NFIP Reauthorization Act of 2017

Long-Term Certainty. Reauthorizes the NFIP for six years, providing certainty for communities.

No Exorbitant Rate Hikes. Ends runaway premium hikes by capping annual increases to 10 percent. Currently, premiums increase by up to 25 percent every year, depressing property values, creating affordability challenges, and discouraging participation in the program.

Cuts Wasteful Expenses to Pay for Investments. Freezes interest payments and establishes new controls for private insurance company compensation in order to reinvest in proactive mitigation efforts and affordability measures, including low-interest loans for homeowners' mitigation projects and affordability vouchers.

Strong Investments in Mitigation. Provides robust funding levels for large-scale, communitywide mitigation efforts, and mitigation assistance programs, which have a 4:1 return on investment and are the most effective way to reduce flood risk.

Expanded Increased Cost of Compliance (ICC) Coverage. Increases the maximum limit for ICC coverage to better reflect the costs of mitigation projects and expands eligibility in order to encourage more proactive mitigation before natural disasters strike.

LiDAR Mapping. Authorizes funding for Light Detection and Ranging (LiDAR) technology for more accurate mapping of flood risk across the country, reducing confusion and generating better data.

Oversight of Write Your Own (WYO) Companies. Caps compensation for WYO companies to 22.4 percent of written premiums, creates new oversight measures for insurance companies and vendors, and provides FEMA with greater authority to terminate contractors that have a track record of abuse.

Claims and Appeals Process Reforms Based on Lessons from Sandy. Fundamentally reforms the claims process based on lessons learned after Superstorm Sandy and other disasters, leveling the playing field for policyholders during appeals and litigation by holding FEMA to strict deadlines for payments to homeowners, banning aggressive legal tactics that prevent homeowners from filing legitimate claims and ending FEMA's reliance on outside legal counsel from expensive for-profit entities.

Better Training. Provides for increased training and certification of agents and adjusters to reduce mistakes and improve the customer experience.