On March 2, Sen. John Kennedy (R-La.) introduced two bills to cap flood insurance premiums and increase transparency around the Federal Emergency Management Agency’s (FEMA) new risk-rating methodology, known as Risk Rating 2.0. Additionally, Sens. Bill Cassidy, M.D. (R-La.) Cindy Hyde-Smith (R-Miss.), Ted Cruz (R-Texas) and John Kennedy (R-La.) introduced the Homeowner Flood Insurance Transparency and Protection Act which would also require FEMA to address concerns about Risk Rating 2.0.

FEMA began its rollout of Risk Rating 2.0 in October 2021 despite warnings that it would increase premium costs for policyholders and that price increases could drive many to cancel their flood insurance coverage. Sen. Kennedy’s Risk Rating 2.0 Transparency Act would require FEMA to publish an explanation of how the agency is determining flood insurance prices under Risk Rating 2.0. Additionally, FEMA would be responsible for creating an online database for policyholders under the National Flood Insurance Program (NFIP) to provide information on premium rates. The Flood Insurance Affordability Act would lower the statutory limit on annual premium increases on primary resident homeowners under Risk Rating 2.0 from the current limit of 18 percent to 9 percent. 

Sens. Cassidy and Smith-Hyde’s Homeowner Flood Insurance Transparency and Protection Act would allow policyholders to retain previous NFIP premium rates prior to the implementation of Risk Rating 2.0 until FEMA addresses several concerns around the development of their risk rating methodology.

NACo has called for further transparency from FEMA about the impacts of Risk Rating 2.0 and will continue to advocate for passage of legislation that would ensure our residents are able to afford their premiums.