Considers Revised Version of HR 3370
Last Friday evening, the
House made available a modified (basically a substitute) version of HR 3370. There will almost certainly be a vote in the
House this week, perhaps as early as tomorrow and we think it will occur
under the "suspension of rules." That means a 2/3 majority would
need to approve, and it means that no changes or amendments will be
ASFPM has been analyzing this
legislation over the past couple days and the legislation is decidedly a
mixed bag. There are good provisions, bad provisions, and much that is left
undone. ASFPM's priorities for any NFIP reform legislation continues to be
addressing affordability, long-term financial stability of the program,
promoting mitigation, and reducing flood losses. There are 26 sections to
the bill and we have done a more extensive analysis, here. Highlights include:
- Eliminates trigger to full actuarial rates on point
of sale; allows assumption of existing flood insurance policies by new
- Creates longer glide path for eventually
eliminating the Pre-FIRM subsidy on all properties. Provides for
increases of at least 5 percent annually of the current premium (but
also subject to the total premium increase cap of either 15 or 25
- Provides for an optional higher deductible
($10,000) for residential properties.
- Eliminates Section 207 related to grandfathered
rates when maps change.
- Requires a surcharge on all flood insurance
policies to pay for the longer glide path. $250 per policy for second
homes and businesses, and $25 per policy for all other structures.
This legislation addresses
flood insurance affordability through what appears to be a better and more
practical glide path than the recently passed Senate bill, or even the
original HR 3370, which simply delay implementation of most increases for
at least four years. However, there are other aspects that are troubling.
The elimination of Section 207 in its entirety means that administrative
grandfathering will continue, and the surcharge on all flood insurance
policies to essentially subsidize policies already getting a discount is
very disturbing. Also disappointing is what is not in the legislation.
ASFPM recommendations for legislative fixes include an emphasis on
mitigation - not only to address long-term affordability, but reduce risk.
Ideas ASFPM has offered include expanding mitigation programs like PDM and
FMA, reforming and making ICC more accessible, and provision of mitigation
loans. HR 3370 does nothing to provide assistance to homeowners to
undertake mitigation, which is the only measure that reduces premiums and
makes people and property safer. Nor does it include any provision for
widely supported targeted assistance for mitigating premiums such as means