What This Bill Does
This bill allows people with flood insurance through the National Flood Insurance Program to choose to keep their old insurance rates instead of paying higher rates. They can make this choice and keep the old rates until the head of the Federal Emergency Management Agency completes several required tasks. The bill requires the agency to make information about how insurance rates are calculated available to the public and policyholders.
Who It Affects
Policyholders under the National Flood Insurance Program. The Federal Emergency Management Agency Administrator. Congress members on the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services.
Key Provisions
- Policyholders may choose to use the insurance rates that were in effect on April 1, 2020 and keep those rates until the Administrator finishes required actions. (Sec. 2(b)(1))
- The Administrator must make available to the public all data and methods used to set insurance rates under Risk Rating 2.0 or similar systems. (Sec. 2(c)(1))
- The Administrator must create an online database showing policyholders what their insurance rates would be under Risk Rating 2.0 and without existing rate limitations. (Sec. 2(c)(2))
- The Administrator must complete and publish a study about how Risk Rating 2.0 affects insurance affordability, availability, property values and government revenues over a 20-year period. (Sec. 2(c)(3))
- The Administrator must conduct a public comment process about Risk Rating 2.0 that includes a fair and transparent process for handling disputes over insurance rates. (Sec. 2(c)(6))
What Changes
Policyholders gain the option to use their April 1, 2020 insurance rates instead of higher new rates while waiting for the Administrator to complete required studies and public processes. The Federal Emergency Management Agency must publish detailed information about how insurance rates are calculated and conduct studies on the impact of new rating methods.
Important Definitions
Administrator: The head of the Federal Emergency Management Agency.
National Flood Insurance Program: The program created under the National Flood Insurance Act of 1968.
Risk Rating 2.0: A methodology for setting insurance rates (the bill does not define what this is beyond naming it).
II
118TH CONGRESS
1ST SESSION
S. 721
To permit policyholders under the National Flood Insurance Program to
elect to have previous premium rates remain in effect until the Adminis-
trator of the Federal Emergency Management Agency satisfies certain
conditions, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 8, 2023
Mrs. HYDE-SMITH (for herself, Mr. CRUZ, Mr. KENNEDY, and Mr. CASSIDY)
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
A BILL
To permit policyholders under the National Flood Insurance
Program to elect to have previous premium rates remain
in effect until the Administrator of the Federal Emer-
gency Management Agency satisfies certain conditions,
and for other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Homeowner Flood In-
4
surance Transparency and Protection Act’’.
5
SEC. 2. CHARGEABLE PREMIUM RATES.
6
(a) DEFINITIONS.—In this section—
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(1) the term ‘‘Administrator’’ means the Ad-
1
ministrator of the Federal Emergency Management
2
Agency; and
3
(2) the term ‘‘National Flood Insurance Pro-
4
gram’’ means the program established under the Na-
5
tional Flood Insurance Act of 1968 (42 U.S.C. 4001
6
et seq.).
7
(b) OPTION FOR POLICYHOLDERS.—
8
(1) IN
GENERAL.—Notwithstanding section
9
1308 of the National Flood Insurance Act of 1968
10
(42 U.S.C. 4015), a policyholder under the National
11
Flood Insurance Program may elect to have the
12
chargeable premium rate for the applicable property
13
of the policyholder, as in effect on April 1, 2020,
14
apply and remain in effect during the period begin-
15
ning on the date of enactment of this Act and end-
16
ing on the date on which the Administrator com-
17
pletes all of the actions described in subsection (c),
18
without regard to the chargeable premium rate that
19
is in effect for that property, as of the day before
20
the date of enactment of this Act.
21
(2) NOTIFICATION
REQUIREMENT.—The Ad-
22
ministrator shall provide each policyholder under the
23
National Flood Insurance Program a notification re-
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•S 721 IS
garding the right of the policyholder under para-
1
graph (1).
2
(c) REQUIRED ACTIONS.—The actions of the Admin-
3
istrator described in this subsection are as follows:
4
(1) Makes available to the public all data and
5
methods used to prescribe chargeable premium rates
6
for types and classes of properties for which insur-
7
ance coverage is available under the National Flood
8
Insurance Act of 1968 (42 U.S.C. 4001 et seq.) (re-
9
ferred to in this subsection as ‘‘chargeable premium
10
rates’’) under Risk Rating 2.0, or any substantially
11
similar methodology.
12
(2) Creates an online database that is available
13
to policyholders under the National Flood Insurance
14
Program that provides each such policyholder with
15
information regarding what the chargeable premium
16
rate for the applicable property of the policyholder
17
would be—
18
(A) under Risk Rating 2.0, or any sub-
19
stantially similar methodology; and
20
(B) assuming that the limitation under
21
section 1308(e) of the National Flood Insur-
22
ance Act of 1968 (42 U.S.C. 4015(e)) were not
23
in effect.
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(3) Completes and publishes a comprehensive
1
assessment of the economic and social impacts of
2
implementing Risk Rating 2.0 (or any substantially
3
similar methodology) during the 20-year period be-
4
ginning in the year in which the assessment is made,
5
which shall include an evaluation of the effect that
6
such implementation will have, during that 20-year
7
period, on—
8
(A) the affordability and availability of
9
flood insurance under the National Flood Insur-
10
ance Program;
11
(B) property values; and
12
(C) non-Federal Government revenues.
13
(4) Supplements (and revises, as appropriate)
14
the Record of Decision for the final nationwide pro-
15
grammatic environmental impact statement evalu-
16
ating the environmental impacts of proposed modi-
17
fications to the National Flood Insurance Program
18
(83 Fed. Reg. 24328) to include the impacts of im-
19
plementing Risk Rating 2.0, or any substantially
20
similar methodology.
21
(5) Demonstrates that the data and methods
22
used to prescribe chargeable premium rates under
23
Risk Rating 2.0, or any substantially similar meth-
24
odology, satisfy the requirements under section 515
25
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of the Consolidated Appropriations Act, 2001 (Pub-
1
lic Law 106–554; 114 Stat. 2763A–153), including
2
that, in implementing that methodology, the Admin-
3
istrator ensures and maximizes the quality, objec-
4
tivity, utility, and integrity of information dissemi-
5
nated by the Administrator.
6
(6) Conducts public notice and comment rule
7
making under chapter 5 of title 5, United States
8
Code, regarding Risk Rating 2.0, or any substan-
9
tially similar methodology, which shall include the
10
development of a fair, transparent, and streamlined
11
process to manage—
12
(A) disputes over chargeable premium
13
rates; and
14
(B) other factors with respect to the imple-
15
mentation of that methodology.
16
(7) For each county in the United States, pub-
17
lishes the distribution of chargeable premium rates
18
showing the median, mean, lower and upper quar-
19
tiles, maximum amount, and minimum amount of
20
chargeable premium rates under each of the fol-
21
lowing:
22
(A) The method used to prescribe charge-
23
able premium rates, as of September 30, 2021.
24
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(B) The methodology projected to be used
1
to prescribe chargeable premium rates, as of
2
April 1, 2022, assuming that the limitations
3
under section 1308(e) of the National Flood In-
4
surance Act of 1968 (42 U.S.C. 4015(e)) are
5
applied.
6
(C) The methodology described in subpara-
7
graph (B), assuming that the limitations de-
8
scribed in that subparagraph are not applied.
9
(D) The methodology described in sub-
10
paragraph (B), assuming that—
11
(i) the limitations described in that
12
subparagraph are applied; and
13
(ii) the administrative costs of the Na-
14
tional Flood Insurance Program are allo-
15
cated on a uniform, per contract basis
16
rather than as allocated under Risk Rating
17
2.0, or any substantially similar method-
18
ology.
19
(E) The methodology described in subpara-
20
graph (B), assuming that—
21
(i) the limitations described in that
22
subparagraph are not applied; and
23
(ii) the administrative costs of the Na-
24
tional Flood Insurance Program are allo-
25
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cated on a uniform, per contract basis
1
rather than as allocated under Risk Rating
2
2.0, or any substantially similar method-
3
ology.
4
(8) Submits to the Committee on Banking,
5
Housing, and Urban Affairs of the Senate and the
6
Committee on Financial Services of the House of
7
Representatives a report detailing the satisfaction of
8
the requirements under paragraphs (1) through (7).
9
Æ
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