Mississippi Insurance Commissioner Mike Chaney filed a lawsuit last month aimed at halting the extraordinary increases to flood insurance resulting from the Biggert-Waters Act passed by Congress in 2012.
The act was meant to buoy the fiscally unsound National Flood Insurance Program and reform the components of it but the move is having drastic effects along America’s coasts resulting in stifled home buying and refinancing, as well as increased foreclosures. Poor states, like Mississippi, are feeling the brunt of the strain, and the effects can be seen from Texas to Maine.
Of issue in the suit are the uncompleted mandatory studies and reports the act requires, which have not been completed and may not be for several years to come. These studies are to review subjects such as accurate elevation maps, a reasonable phase in of actuarially sound rates after the studies are completed, enforcement of building codes for new construction, proper land use, the use of reinsurance and more. Read the filing here: http://www.mid.ms.gov/pdf/NFIP-Complaint.pdf
It should be noted that Mississippi Attorney General Jim Hood chose not to represent the state in Chaney's filing, but did give the go ahead for outside counsel.
When Chaney filed the suit, he noted that the National Flood Insurance Program has long needed reform.
"We know the program is deeply in debt,” Chaney said, “but it seems grossly unfair to place that burden directly on homeowners who simply followed the rules and did what was asked of them."
Since the filing, Chaney has been working to gain support from fellow Insurance Commissioners along the coastline.
South Carolina and Florida are reportedly filing amicus briefs with Pascagoula attorney Jimmy Heidelberg likely representing both states, as well as the Mississippi Wind Pool who has also filed an amicus brief.
Efforts by Mississippi’s Congressional delegation have increased in recent weeks coinciding with the suit. Congressman Steven Palazzo (MS-04) is pushing the Homeowner Flood Insurance Affordability Act in the U.S. House while Senators Roger Wicker and Thad Cochran are pushing the measure in the Senate.
Highlights of the bill include:
- Imposes a delay likely to total four years for the most vulnerable properties, by delaying implementation of rate increases until two years after FEMA completes an affordability study, which was mandated in Biggert-Waters but not undertaken.
- Requires FEMA to propose an affordability framework that addresses the identified affordability issues within 18 months after the completion of the study and provides 6 months for Congressional review.
- Allows FEMA to utilize National Flood Insurance Funds to reimburse policyholders who successfully appeal a map determination.
- Protects the so-called “basement exception,” which allows the lowest proofed opening in a home to be used for determining flood insurance rates.
- Establishes a Flood Insurance Rate Map Advocate within FEMA to answer current and prospective policyholder questions about the flood mapping process.
- Requires FEMA to certify that the agency has fully adopted a modernized risk-based approach to analyzing flood risk.
With the vast citizenry these increases affect it would seem plausible to expect significant bipartisan Congressional support for such a bill since in the end it was their action which caused the problem, however as we have seen of late even the most obvious measures can find quicksand.
Sources tell Yall Politics if the bill is brought to the House floor it is likely to pass. Its fate is not viewed as positively in the Harry Reid-led Senate, where the Senate Democrat Majority Leader seemingly only allows floor votes on bills blessed by the Obama White House.
Mike Chaney and municipal leaders were once crying in the wilderness, with little hope of having their voices heard. Now Chaney’s efforts are leading the way for everyone who has a mortgage, who wants to buy a home on the coasts but cannot afford the outrageous increases Congress imposed.
Posted November 4, 2013 - 2:38 pm