The U.S. Senate has passed the Menendez-Grimm bill, also known as HR 3370, also known as the Homeowner Flood Insurance Affordability Act of 2013, also known — informally, at least — as the antidote to Biggert-Waters. After months of wrangling in both the House and the Senate, the bill is finally making its way to the president’s desk, where it may or may not be signed. We have been following the action for the past few months.
Not surprisingly, the bill undoes much of what the Biggert-Waters Flood Insurance Reform Act of 2012 did, avoiding what Senate sponsor Bob Menendez, D-N.J., referred to as “the manmade perfect storm that would have crushed thousands of families under the weight of skyrocketing flood insurance rates, forced many from their homes, plummeted property values and destroyed entire communities.” (Florida policyholders who have already paid those skyrocketing premiums will take comfort in knowing they will be reimbursed under Menendez-Grimm.)
The reforms of Biggert-Waters were intended to make the National Flood Insurance Program solvent. NFIP is running on a $25 billion deficit, and the move toward actuarially sound rates under Biggert-Waters would have dealt with the debt. Reluctant lawmakers may have been convinced to support the Menendez-Grimm bill when the Congressional Budget Office determined that the law will not add to the deficit. If all goes as planned, the act should help to pay down the deficit through modest assessments levied on policyholders.
One of the items missing from Menendez-Grimm that the original Senate bill included is the National Association of Registered Agents and Brokers Act. (We discussed the NARAB Act in our Feb. 10 post.) Agents, brokers and their professional associations still hold out hope that Congress will approve the measure at some point.
But what about those premiums and discounts that Biggert-Waters messed up? We will get into the particulars in our next post.
Source: Carrier Management, “Senate OKs Bill to Curb Flood Insurance Hikes,” Andrew Simpson, March 14, 2014Share