Legislation passed in House aiming at BW12 reform
On Tuesday, March 4, 2014, the US House of Representatives passed legislation aimed at reforming some of the changes mandated by the Biggert-Waters Flood Insurance Reform Act of 2012 (BW12). This new legislation is known as HR 3370, the Grimm-Waters bill, and while it has similar intent to the bill that the US Senate passed on January 30th, there are some key differences. The proposed Grimm-Waters bill:
- Prevents FEMA from raising average rates above 15% for a class of properties and above 18% on individual policies per year.
- Rescinds provisions in BW12 requiring individuals to pay the full-risk rate for Pre-FIRM properties at the time of purchase.
- Rescinds provisions in BW12 requiring Pre-FIRM property owners to pay the full-risk rate if they voluntarily purchase a new policy.
- Rescinds provisions in BW12 terminating grandfathering.
- Requires FEMA to refund policyholders for ‘overpaid’ premiums.
For a full summary of the proposed bill, please click here.
Please note, the Grimm-Waters bill must still be reviewed and voted on by the US Senate and then ultimately needs to be signed by the President prior to becoming law.
About Biggert-Waters Flood Insurance Reform Act (BW12)
In July 2012, the U.S. Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) which calls on the Federal Emergency Management Agency (FEMA), and other agencies, to make a number of changes to the way the National Flood Insurance Program (NFIP) is run. Some of these changes already have occurred, and others will be implemented in the coming months. Key provisions of the legislation will require the NFIP to raise rates to reflect true flood risk, make the program more financially stable, and change how Flood Insurance Rate Map (FIRM) updates impact policyholders. The changes will mean premium rate increases for some—but not all—policyholders over time. Homeowners and business owners are encouraged to learn their flood risk and talk to their insurance agent to determine if their policy will be affected by BW-12.
To learn more about BW12, click here to visit FEMA.gov.
We will continue to monitor the progress of these bill changes and will update our newsfeed as needed. Contact your South Shore Insurance (SSIA) team for any questions about your flood insurance policy.