Congress is currently deflecting intense pressure to roll backvirtually all the increases in flood insurance premiums imposed bya 2012 National Flood Insurance Program reauthorization law thatwon strong support when it was enacted.

Amongst the opponents of the rollback are Write-Your-Owninsurance companies, who have already adjusted computer programsrate increases effective Oct. 1, per a provision in the lawimpacting second homes, businesses, and repetitive loss properties,plus the existing (pre-FIRM) properties that would lose theirgrandfathering upon resale or refinancing.

At the moment, congressional leadership is apparently supportingefforts to delay for one year premium rate increases imposed onproperties if they are remapped.

WYO companies are less opposed to this as the lesser of evilsbecause this provision is not scheduled to go into effect untilnext year and the Federal Emergency Management Agency hasn't evenprovided WYO companies instructions pertaining to the reprogrammingof their computers for this provision, Sec. 207.

Louisiana interests, led by Sen. Mary Landrieu, D-La.,effectively want to roll back—hopefully permanently—virtually allthe rate increase imposed by the 2012 law.

She is being pushed the most by Rep. Bill Cassidy, R-BatonRouge, who is a Republican candidate for her seat. Cassidy authoredan amendment to the Homeland Security appropriations bill in theHouse several weeks ago that did the same thing as Landrieuseeks.

South Louisiana parish residents and other interests contend thelaw makes thousands of “grandfathered” homes unsellable and thatFEMA is underestimating the impact of rate changes.

As to the delay in implementing Sec. 207, the SenateAppropriations Committee took an important step by passing theHomeland Security Department budget for 2014, 21-9.

The provision in the Homeland Security appropriations bill willdelay enforcement of Sec. 207 of the law for one year by barringuse of federal funds to implement the rate hike.

The provision requires rate increases on all properties remappedinto a higher-rated flood zone, even if the property had been builtto specifications.

Under the law, the increases would be phased in over fiveyears.

The action by the full Senate Appropriations Committee wasapparently based on an understanding by a strong majority ofCongress that the impact of the 2012 law was not fully perceived,especially the political ones from the rate increases, before thelaw was passed—and time is needed to revise it.

As an industry official and a Federal Emergency ManagementAgency official both stated, “They have made such a mess, even thecleanup is going to be messy.”

The lobbyist said, for example, “Banks that escrow for flood,and insurance companies that need to make sure that the policiesare in place with premiums paid, are going to be very confused byall this - so too will the policyholders who will notunderstand all the conflicting information that they will begetting.”

FEMA contends that the revisions in the National Flood InsuranceProgram enacted last year does not affect more than 400,000 ofLouisiana's nearly 500,000 flood insurance policies because theirflood insurance rates are already appropriately set.

But, Louisiana residents are generally upset that thereauthorization legislation includes rate hikes of up to 25% a yearon non-primary residences, businesses, and homes that have floodedmultiple times.

They acknowledge that primary residences currently receivingsubsidized “grandfathered” rates are not affected until the home issold or the policy lapses.

That includes “grandfathered” properties were built before theNFIP started in 1968 and also applies to properties that have seentheir flood risks increase over the years.

This article was originally posted at PropertyCasualty360.com,a sister site of Credit Union Times.