ASFPM supports many of the provisions of the 2012 NFIP Reform bill, otherwise known as Biggert-Waters 2012, usually shortened to BW-12. A centerpiece of this reform bill was to make the NFIP more financially sound. At the time the bill passed (May 2012) and was signed (7-6-12), the NFIP was over $17 billion in debt to the US Treasury (taxpayer), with little chance the program could ever repay that debt (now, the program is $23 billion in debt to the Treasury , [expected to go to $25 billion as a result of Sandy]). As such, Congress looked closely at why the program was in debt and what could be changed to improve it. The changes include many provisions for significant increases in flood insurance premiums to move them toward full risk rates and other measures to improve the financial soundness of the NFIP. ASFPM supports fiscal soundness for the NFIP.
What the legislation did not address is the effects of the changes on policyholders and the affordability of flood insurance policies for those that truly cannot afford the increases. While there was a study included in BW-12 to examine affordability issues; it had no implementation mechanism. There are now a number of bills being proposed that would roll back the premiums or lengthen the time policyholders would have to move to full risk premium rates. This paper discusses BW-12, the need for a financially sound NFIP, and the options to address the affordability issue for lower income people who may not be able to afford the rate increases or for those who may need time to adjust to the premium increases.
ASFPM's recommendations to address the NFIP Reform BW-12 flood insurance affordability issue can be found in the full paper posted here on the NFIP page of the ASFPM website: