U.S. Sen. Bill Cassidy (R-LA) wants to know why a congressional request for a briefing on the Federal Emergency Management Agency’s (FEMA’s) Risk Rating 2.0 pricing methodology has gone unanswered.
“In October of 2021, this office first requested a briefing with FEMA and the Louisiana delegation to discuss the National Flood Insurance Program and specifically the implementation of Risk Rating 2.0,” wrote Sen. Cassidy in a Nov. 3 letter sent to FEMA Administrator Deanne Criswell. “It has now been over a year and we have yet to receive a response with a time your department would be willing to provide such a briefing.”
FEMA is updating the National Flood Insurance Program’s risk rating methodology through the implementation of a new pricing methodology called Risk Rating 2.0, which leverages industry best practices and cutting-edge technology to enable FEMA to deliver what it says are rates that are actuarially sound, equitable, easier to understand and better reflect a property’s flood risk.
However, Sen. Cassidy noted that FEMA’s plan to implement the Risk Rating 2.0 program first and provide details later is causing havoc. “It has left policyholders in the dark without the basic information they need to prepare for the future,” he wrote.
Additionally, insurance agents in Louisiana have told the senator that FEMA has not given them the information they need to adequately assist policyholders in navigating program changes, according to his letter.
“This uncertainty is damaging and inexcusable,” wrote Sen. Cassidy. “Despite years to plan the rollout of Risk Rating 2.0, FEMA is not meeting its basic obligations to serve my constituents.”
Sen. Cassidy pointed out that insurance agents previously could tell policyholders how much elevating their home, or making other improvements, would reduce their flood insurance rates. Today, though, the information FEMA provides is not sufficient for this purpose, he wrote.
“This is a serious problem for the new home construction market, as homebuilders don’t know what metrics to target,” wrote the lawmaker. “It also affects current policyholders who cannot make plans to address the coming rate hikes as they don’t know what FEMA will accept for mitigation.”
Sen. Cassidy also wrote that when FEMA recently responded to questions from Congress on the transparency of the Risk Rating 2.0 rating methodology, the agency provided “inscrutable calculation worksheets and rating factors” that failed to show how flood insurance rates and premiums are calculated.
“Concerned constituents are contacting my office daily in dire need of clarity FEMA is not providing,” he wrote.
FEMA’s lack of communication, he added, greatly diminishes any confidence in the agency’s ability to implement Risk Rating 2.0. “FEMA must be transparent to Congress and our constituents about the true extent of these premium increases,” wrote Sen. Cassidy.