The U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing concerning the National Flood Insurance Program (NFIP) on May 2. The hearing, “Reauthorization of the National Flood Insurance Program: Improving Community Resilience,” featured as witnesses Dr. Carolyn Kousky, associate vice president for economics and policy at the Environmental Defense Fund; Roy Wright, president and CEO of the Insurance Institute for Business & Home Safety; and Patty Hernandez, executive director of Headwaters Economics. The hearing follows a similar hearing held by the U.S. House of Representatives’ Committee on Financial Services in late April.
The NFIP is a government-sponsored provider of insurance for flooding specifically. Because of the threat of repeat flooding, many private insurance companies find it difficult to maintain policies regarding flood risk, which initially prompted the creation of the FEMA-run NFIP. In recent years, the program has suffered from significant amounts of debt, a lack of affordability provisions for households with low incomes, and confusion about flood mapping and mandatory requirements for purchasing.
Questions from members of the Committee focused on the mechanics of forgiving the program’s substantial amount of debt (a requirement if the program is to be kept afloat); ensuring that resilience standards are being implemented along with flood insurance coverage; and methods for deploying mitigation funding before disasters impact an area. Senator Elizabeth Warren (D-MA) asked specifically about the program’s failure to collect data on the race and ethnicity of policy holders. The absence of such data makes it impossible to analyze potential discrimination in the program.
Listen to the hearing at: https://bit.ly/3VACgnu