On March 13, the U.S. Senate passed HR 3370, the "Homeowners Flood Insurance Affordability Act of 2014," and President Obama is expected to sign it into law. Both SC Senators voted in favor of the bill.  

Highlights are available below, but IIABSC will post additional materials as they are available. 

The bipartisan bill would make changes to the Biggert-Waters Act of 2012 (Biggert-Waters) in order to help with the “sticker shock” some consumers are facing as a result of two provisions that create drastic premium increases in many parts of the country. The House passed H.R. 3370 on March 4, 2014 in a 306–91 vote.

Menendez-Grimm “Homeowner Insurance Affordability Act” Brief Highlights:

• Property sales trigger (Sec. 205 “bought/sold”). Repeals the provision in Biggert-Waters that required homebuyers to pay the full-risk rate for pre-FIRM properties at the time of purchase.
• Sec. 207 (“grandfathering”). Repeals Section 207 in Biggert-Waters that would have terminated grandfathering.
• Retroactivity and Refunds. Requires FEMA to refund policyholders for overpaid premiums.
• Annual premium surcharge. Imposes a $25 per policyholder per year ($250 per commercial policyholder) surcharge in order to pay for these reforms, which will be set aside in a NFIP reserve fund to pay future claims.
• High deductible plans. Increases the maximum deductible for single family residences (and 2-4 family buildings) to $10,000.
• Monthly installment payments. Authorizes FEMA to allow NFIP premium payments both monthly and annually.
• Annual rate increase cap. Prevents FEMA from raising the average rates for a class of properties above 15% (18% for individual properties). Biggert-Waters set this rate at 20%.
• Flood Insurance Advocate. Establishes a Flood Insurance Advocate within FEMA to answer current and prospective policyholder questions about the flood mapping process and flood insurance rates.
• Affordability goal. Puts in place a nonbinding goal for FEMA to minimize the number of policies with annual premiums that exceed one percent of the total coverage provided by the policy.
• Mapping accuracy. Requires FEMA to certify in writing to Congress that it has implemented a flood mapping approach that results in technically credible flood hazard data in all areas where flood maps are used.
• Notification of rate increases. Requires FEMA, at least 6 months prior to implementation of rate increases to make publicly available the rate tables and underwriting guidelines that provide the basis for the change.
• Reimbursement for successful appeals. Allows FEMA to utilize the National Flood Insurance Fund to reimburse policyholders and communities that successfully appeal a map determination.

View analysis of HR 3370

View full legislation

View IIABSC's upcoming "Insuring Coastal Exposures" course

IIABSC is expecting both a detailed memo and a webinar on the practical impact of this legislation as it affects independent agents, coming soon.