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In a breakthrough, the House Republican leadership has agreed to allow a vote on modifying flood insurance rate hikes imposed by a 2012 law. That effectively means Congress will enact legislation dealing with the issue in the foreseeable future, perhaps by mid-March.

Realizing the political potency of the issue, House Majority Leader Eric Cantor, R-Va., announced Wednesday night that a vote on such legislation will take place after Congress returns from its Lincoln holiday recess the week of Feb. 24.

The preferred House bill is one that limits rate increases across-the-board to no more than 15% annually, PC360 has learned. There is even the potential that some of those who have been paying the higher rates since bills started going out last October could get refunds because the preferred bill would be retroactive to Oct. 1, 2013, when the bills under the new law started going out.

Cantor acted after the House leadership three times effectively blocked efforts by House Democrats to get a vote on the Senate’s bill, S. 1926, which effectively rules out any rate increases until the current NFIP authorization runs out Sept. 30, 2017. 

House Speaker John Boehner, R-Ohio, voiced opposition -- at the request of SmarterSafer.org, an industry group which opposes any substantive rollback in the current law -- to the Senate bill before it was even passed. But in dropping opposition and bringing up a flood bill, the House leadership effectively ensured that some rate rollback is in the cards.

The preferred House bill is one that limits rate increases across the board to no more than 15% annually, PC360 has learned. There is even the potential that some of those who have been paying the higher rates since bills started going out last October could get refunds because the preferred bill would be retroactive to Oct. 1, 2013, when the bills under the new law started going out.

Cantor acted after the House leadership three times effectively blocked efforts by House Democrats to get a vote on the Senate’s bill, S. 1926, which effectively rules out any rate increases until the current NFIP authorization runs out Sept. 30, 2017. 

House Speaker John Boehner, R-Ohio, voiced opposition, at the request of SmarterSafer.org, an industry group which opposes any substantive rollback in the current law, to the Senate bill before it was even passed.

Cantor said in a statement the Senate bill irresponsibly removes much needed reforms and imposes additional costs on taxpayers. “The House will act to protect the flood-insurance program but also protect homeowners from unreasonable and unrealistic premium increases,” he said.

However, both House and Senate staffers pointed out that the House version of the Senate bill has more than 230 co-sponsors.

Rep. Maxine, Waters, D-Calif., says the Senate bill passed by a huge margin and without controversy. “Today, a majority of House members have signed on as cosponsors – meaning we know with absolute certainty that this legislation will pass if brought up for a vote.”

Insurance-industry officials voiced guarded support that the House will craft a bill they can support. They fear the huge and growing deficit in the NFIP that would be sustained based on recently-passed Senate legislation rolling back the 2012 rate hikes constitutes a long-term political problem for the industry. They want the 2012 law modified, but not repealed.

The 2012 legislation, the Biggert-Waters Act, has stirred intense controversy and prompted a lawsuit pending in Mississippi Federal Court backed by 22 states that would bar the rate hikes until FEMA conducts an affordability study.

B-W mandated imposition of actuarial rates for the NFIP over four years.

Industry officials cringed when, during Senate-floor debate on the issue, Sen. Heidi Heitkamp, D-N.D., cited the case of one woman homeowner in her state whose $60,000 NFIP policy was going to rise from the current $625 to $10,600 in one fell swoop.

Eighty-four Write-Your-Own insurers are the public face of the program. They sell, service and administer the National Flood Insurance Program on behalf of FEMA. Insurers are concerned that any changes in the current law will require costly changes in billing software and that a poorly written bill will continue the uncertainty surrounding the program.

“We commend the majority leader for acknowledging the need for reforms and protecting the NFIP, and look forward to working with members of the House to make appropriate changes that protect taxpayers, consumers and the long-term fiscally soundness of the flood-insurance program,” says Nat Wienecke, senior vice president, federal government relations for the Property Casualty Insurers Association of America (PCI).

Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies, says NAMIC is glad that House leaders have recognized the Senate's “irresponsible approach” to flood-insurance reform is costly and excessive.

“For far too long, common-sense policy on flood insurance has taken a back seat to political opportunism, and we hope the House will live up to its promises of taking a balanced approach that will not simply put the burden of flood risk back onto the taxpayers,” Grande says.

Arthur D. Postal is a contributor to PC360. Prevoiusly, he was National Underwriter's Washington Bureau chief. 

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