2014 -- S 2293

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LC003969

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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S E N A T E   R E S O L U T I O N

RESPECTFULLY REQUESTING THE UNITED STATES CONGRESS TO PASS THE

HOMEOWNERS FLOOD INSURANCE AFFORDABILITY ACT

     Introduced By: Senators Bates, Ottiano, Hodgson, Sosnowski, and Kettle

     Date Introduced: February 04, 2014

     Referred To: Senate Special Legislation and Veterans Affairs

     WHEREAS, The National Flood Insurance Act of 1968 was enacted to provide

previously unavailable flood insurance protection to property owners; and

     WHEREAS, The National Flood Insurance Program continues to provide important and

necessary property coverage for home and business owners throughout parishes, counties, and

communities nationwide; and

     WHEREAS, The Biggert-Waters Flood Insurance Reform Act of 2012 was signed into

law on July 6, 2012, and calls for a revision of the flood insurance rate maps; and

     WHEREAS, The intent of the Biggert-Waters Flood Insurance Reform Act of 2012 was

to relieve taxpayers from the recurring need to fund the National Flood Insurance Program

through both pre-event premiums and post-event debt; and

     WHEREAS, The Biggert-Waters Flood Insurance Reform Act of 2012 calls for an

evaluation of the use of private reinsurance to protect against catastrophic losses and to stabilize

the National Flood Insurance Program's results and financial position; and

     WHEREAS, Such revised flood insurance rate maps do not include the discounts granted

by the current rate maps to property owners who have taken action to mitigate property damage

by installing and maintaining flood control features, in conformity with the most current federal

law available to them, and in conformity with current flood insurance rate maps; and

     WHEREAS, Countless property owners have built and purchased homes and businesses

in accordance with the current flood rate insurance maps which, under the provisions of the

Biggert-Waters Flood Insurance Reform Act of 2012, will soon enter obsolescence; and

     WHEREAS, The act also includes provisions, located in Section 207 of such act, that

eliminate the "grandfathering" of homes that were built after the existing flood insurance rate

maps in accordance with then existing laws; and

     WHEREAS, By purchasing homes and businesses in accordance with the provisions of

the former flood rate insurance maps and by investing in previously owned property to install

flood mitigation features, property owners relied on their strict compliance with federal and state

law to protect their purchases and investments; and

     WHEREAS, In light of the provisions of the Biggert-Waters Flood Insurance Reform Act

of 2012, the reliance on existing flood insurance rate maps that those property owners

demonstrated is now to their personal and financial detriment; and

     WHEREAS, The passage of the Biggert-Waters Flood Insurance Reform Act of 2012

substantially and immediately devalued the investments made in all properties endowed with

flood damage mitigation measures and to properties receiving subsidized insurance premium

rates; and

     WHEREAS, The Biggert-Waters Flood Insurance Reform Act of 2012 also includes

provisions that permit the National Flood Insurance Program to increase premium rates for many

policyholders; and

     WHEREAS, The elimination of these discounts combined with the certainty of general

premium rate increases will result in a premium increase of up to twenty-five percent per year for

certain property owners over the next four years; and

     WHEREAS, Under the changes to the National Flood Insurance Program caused by the

Biggert-Waters Flood Insurance Reform Act of 2012, certain property owners will struggle to pay

exorbitant amounts of money or will lose their flood insurance; and

     WHEREAS, A change in the ability of property owners to insure their homes from flood

damage without bearing the burden of such a violent rise in cost may lead to financial distress for

residents and property owners around this nation; and

     WHEREAS, The premium increases to the National Flood Insurance Program, as

mandated by the Biggert-Waters Flood Insurance Reform Act of 2012, will affect the entire

nation's real estate market and the nation's banking and mortgage industry; and

     WHEREAS, The premium increases to communities and property owners who made

their best efforts to comply with federal law by building property in accordance with soon to be

outdated flood insurance rate maps will affect consumer confidence and the entire nation's

economy; and

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     WHEREAS, On October 29, 2013, H.R. 3370 and SB 1610, the Homeowner Flood

Insurance Affordability Act of 2013, were introduced in the respective houses of Congress to

delay the implementation of certain provisions of the Biggert-Waters Flood Insurance Reform

Act of 2012; and

     WHEREAS, The Biggert-Waters Flood Insurance Reform Act of 2012 provides that an

affordability study be conducted by the Federal Emergency Management Agency on the impact

of rate increases, which study has not been conducted; and

     WHEREAS, The Federal Emergency Management Agency is currently undertaking a

flood risk insurance study that will entail, among other things, the development of a flood

catastrophe model to enable financial analysis of the National Flood Insurance Program and a

study of the availability and benefits of risk transfer through the use of private reinsurance; and

     WHEREAS, The United States Congress should consider passage of the Homeowner

Flood Insurance Affordability Act of 2013 that would delay the provisions of the Biggert-Waters

Flood Insurance Reform Act of 2012 that provide for the increase of premium fees for

policyholders of the National Flood Insurance Program, in order to prevent the unduly hazardous

effects it will have on home and business owners who invested in property prior to the adoption

of the new federal legislation and flood insurance rate maps; now, therefore be it

     RESOLVED, That this Senate hereby respectfully supports and urges the United States

Congress to pass the Homeowners Flood Insurance Affordability Act currently pending before

Congress as H.R. 3370 and SB 1610, which will delay the implementation of the National Flood

Insurance Program changes until two years after the Federal Emergency Management Agency

completes the affordability study on the impact of the rate increases; and be it further

     RESOLVED, That this Senate hereby supports and urges the United States Congress and

the Federal Emergency Management Agency to actively and expeditiously explore the use of

private reinsurance to protect against catastrophic losses and to stabilize the National Flood

Insurance Program's results and financial position; and be it further

     RESOLVED, That the Secretary of State be and hereby is authorized and directed to

transmit duly certified copies of this resolution to Rhode Island's Congressional Delegation, and

to the Administrator of the Federal Emergency Management Agency.

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LC003969

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