This week the U.S. House of Representatives’ Financial Services Housing and Insurance Subcommittee held a hearing concerning the National Flood Insurance Program and implementation of the 2012 Biggert-Waters Flood Insurance Reform Act (BW-12).  Witnesses included Federal Emergency Management Agency Director and former Florida Division of Emergency Management Director Craig Fugate, along with representatives from the National Wildlife Federation, National Association of Realtors, National Association of Home Builders, Association of Flood Plain Managers, American Action Forum and Greater New Orleans, Inc.

The four-hour hearing highlighted the difficulty of fixing the National Flood Insurance Program and the differing opinions surrounding the implementation of Biggert-Waters.  Much of the discussion focused on sky-rocketing flood insurance premiums, which resulted from the passage of BW-12 and that co-sponsor of the Act Rep. Maxine Waters (CA-43) said is an “unintended consequence.” According to the Committee on Financial Services, BW-12 was a step toward reforming the National Flood Insurance Program, which is experiencing a $24 billion shortfall. The Act intends to phase out subsidies, generate an estimated $2.7 billion increase in net income to the program over 10 years and encourage a greater role for the private sector in providing flood insurance coverage. Portions of the law went into effect this past January and October and are already having significant impacts on Floridians.  Florida’s property owners hold 37 percent – or 2 million - of the nation’s flood insurance policies. Thirteen percent of the policies owned by Floridians are subsidized.

FEMA Administrator Fugate defended FEMA’s implementation of Biggert-Waters and FEMA’s work on an affordability study required by the law. While Fugate did not commit to a completion date for the study, he said it could be four or six years, which Congress would need to consider if any plans to delay rate increases move forward.  Fugate also discussed the solvency of NFIP saying, “We cannot subsidize going forward.”  At some point, he said, “insurance rates have to reflect the real risk of flooding in order for the program to be actuarially sound.”

As a member of the House Subcommittee, Florida’s Rep. Dennis Ross participated in the hearing and highlighted the concerns of Floridians, calling for Congress to work toward solutions and serious discussions about affordability, private market risk capacity and the NFIP’s premium collection. (Read Rep. Ross’s opening statement). Overall, both Democrats and Republicans spoke to the concerns over flood insurance affordability. The Committee, however, gave no indication of next steps to address the issues raised during the hearing. The Homeowners Flood Insurance Reform Act of 2013 (H.R. 3370/S. 1610) that would delay flood insurance rate increases for certain properties for up to four years currently has 133 co-sponsors in the House and 23 co-sponsors in the Senate. Representative Michael Capuano of Massachusetts said during the hearing he plans on adding an amendment to the bipartisan legislation to include rate delays for small business and second homes, which would further help Floridians.

FAC continues to work on Biggert-Waters reform as a priority federal issue and to speak with member offices, including most recently discussions with the offices of Senator Rubio and Representatives Dennis Ross, Bill Posey, Patrick Murphy, and Tom Rooney. FAC is currently working on a policy paper that would recommend affordability and mitigation strategies for consideration while advocating for a delay.  

To read testimony from the hearing or watch the webcast, visit

To read more on FAC and Congressional actions, visit

(Information contributed by The Ferguson Group, Van Soyoc Associates)