Cassidy files flood insurance bill

The congressional fight to delay skyrocketing flood insurance rates in Louisiana and the rest of the nation hit a partisan divide Wednesday, with Louisiana Republicans and Democrats splintering on the best way forward.

Rep. Bill Cassidy, R-Baton Rouge, filed legislation Wednesday that would delay some of the flood insurance premium hikes for Louisiana residents and others nationwide, as new flood maps are adopted.

But some Democrats, such as Rep. Cedric Richmond, the New Orleans Democrat whose district also includes much of Baton Rouge, said Cassidy’s bill is politically motivated and ineffective, and could undermine efforts for a more comprehensive fix with the National Flood Insurance Program.

Cassidy’s proposed new Flood Insurance Relief and Transparency Act does not go as far in delaying flood insurance rate hikes as other proposed legislation, such as the Homeowner Flood Insurance Affordability Act, which the Louisiana congressional delegation supports.

But a key difference is that the GOP House leadership is backing Cassidy’s new bill. It is expected to receive a House floor vote this week.

Cassidy’s bill primarily delays National Flood Insurance Program rate hikes until March 2015 for property owners who find themselves in greater flood risk assessment areas on flood maps that are being drawn by the Federal Emergency Management Agency. Most of the FEMA mapping is about a year from being completed, so Cassidy’s bill amounts to delaying hikes by a matter of months, not years.

Cassidy is challenging Sen. Mary Landrieu, D-La., for her Senate seat next year.

The Cassidy legislation would lift the funding cap to expedite completion of FEMA affordability studies. The bill also would make FEMA more transparent about proposed rate adjustments. It would require the agency to provide policyholders with the option to make monthly installments on their flood insurance premiums.

In his announcement, Cassidy said his bill is part of a “multi-step approach” to solving the flood insurance problems, not a silver bullet.

“The legislation will provide additional funding to expedite FEMA’s affordability study to ensure flood rates are fair for Louisiana families,” he stated. “Further, the legislation will require FEMA to be more transparent and give Louisiana families more options.”

The NFIP has been in financial distress, with a loss of nearly $25 billion, largely due to payments made after hurricanes Katrina and Rita in 2005. Louisiana has nearly 500,000 NFIP policies, and there are more than 5.5 million policyholders nationwide.

The alternative legislation filed in October, the Homeowner Flood Insurance Affordability Act, goes further in delaying rate hikes and helping more policyholders. While that bill has been gaining support, it has not picked up enough support yet to get floor votes in either the House or Senate.

Richmond is pushing that bipartisan, bicameral legislation, which he argues has enough votes to pass both chambers.

“I don’t think Cassidy’s bill does much, and ... I’m not sure this would give relief to anyone in Louisiana. This is the Republican leadership playing games with either an election or just politics, but we can’t afford to do that with our national flood insurance,” Richmond said. “It really could hurt our long-term effort to get it done because members who we’ve really had to convince to do this may feel like they think they’ve fixed the problem by voting for the Cassidy bill.”

But Rep. Steve Scalise, R-Jefferson, said Cassidy’s new bill still represents progress.

“We’ve got to get both a short-term and a long-term solution,” Scalise said. “Obviously, the Cassidy amendment makes it better. It doesn’t solve all the problems. It never was sold as that, but it absolutely puts us in a better position to build a coalition to solve this long term.”

At least the House is acting, Scalise said. “We need the Senate to take some action,” he added.

Cassidy filed his bill the same day Landrieu led an hourlong discussion promoting the Homeowner Flood Insurance Affordability Act with several other backers of the bill on the Senate floor.

They sought “unanimous consent” approval of the bill, but it was objected to and blocked by Sen. Mike Crapo, R-Idaho.

The legislation focuses on delaying by about four years the insurance hikes on primary residences — excluding properties that suffered repeated flooding — that have received “grandfathered” lower premiums. The legislation also would delay the property sale “trigger” so that homes and businesses sold after July 6, 2012, do not see dramatic automatic insurance increases. Cassidy’s bill does not address that “trigger.”

Landrieu said she will continue to push for a vote before the end of the year. “I hope he (Crapo) will consider the tragic ramifications of his objection for millions of homeowners and businesses around the country and work with us the next few days to mitigate any of his objections,” Landrieu said, although there are other senators who likely would object as well.

Upcoming flood insurance rate increases will decimate “middle-class families, small business owners that have poured their life savings into homes and businesses,” she said. She warned that “the real estate market is going to be shaken to its core.”

Landrieu also read a letter from a retired woman in the Broadmoor neighborhood of New Orleans who has a fixed income and will not be able to keep or sell her home with “significantly increased rates.”

“This is not a millionaire in a mansion on a beach,” Landrieu said. “This is a 66-year-old woman who just got her (first) Social Security check.”

Neither piece of legislation would help policyholders of businesses, secondary vacation homes or homes that repeatedly flooded, which were all grandfathered into artificially lower premiums for flood insurance before flood maps were created. Such affected policyholders will see 25 percent annual premium increases starting right away.