A federal flood agency official said Wednesday that it will takeup to two years for a study on affordability issues related to theNational Flood Insurance Program to be completed.

Craig Fugate, NFIP administrator for the Federal EmergencyManagement Agency, made that comment in response to the requestfrom critics of the rate increases now being implemented for theNFIP that the hikes be delayed until the study is completed.

Related: Miss. Commissioner Promises Suit Against NFIP

Currently, bills for the rate hikes, mandated by theBiggert-Waters Act of 2012, will start going out Oct. 1.

But, Fugate said, “The (National Academy of Sciences)estimates that it will likely take at least two years to completethe study due to the need to obtain data on policy-holders andtheir incomes.”

Fugate made his comments at a hearing convened by the EconomicPolicy Subcommittee of the Senate Banking Committee. The meetingwas chaired by Sen. Jeff Merkley (D-Ore.)

The hearing was tense as both supporters and opponents of therate increases voiced their views.

State insurance regulators, members of Congress and citizensfrom Texas and other states along the Gulf Coast, joined byofficials and NFIP customers from Florida to Vermont, are voicingdeep concern about the affordability issue. They fear rateincreases of up to 3,000% as mandated by the law will force peopleto give up their homes.

However, Alicia Puente Cackley, director of Financial Marketsand Community Investment for the Government Accountability Office,said the GAO's study of the issue found limited problems.

Cackley testified that, in a study of remaining subsidies, theGAO estimated that with the changes in the rates mandated byBiggert-Waters, approximately 438,000 policies no longer areeligible for subsidies, including about 345,000 policies for secondhomes, about 87,000 business policies, and about 9,000 policies forsingle-family properties that had severe-repetitive losses.

Cackley said that subsidies on most of the approximately 715,000remaining subsidized policies are expected to be eliminated overtime as properties are sold or coverage lapses, as are previousexemptions from rate increases after flood zone map revisions.

Fugate's testimony was consistent with that of Cackley. He saidapproximately 20% of policyholders, representing approximately 1.1million of the 5.6 million NFIP policies, now pay subsidizedrates.

He added that as FEMA implements the changes stipulated in thenew law, these policyholders will eventually pay rates that reflectactual risk to their properties.

“The remaining 80% of policyholders will not see increasesas a result of this change, although it is possible that theirrates will increase if, in the future, new maps reveal higher riskunder the phase-out of grandfathered rates required by thelegislation,” Fugate testified at Wednesday's session.

Fugate said that, as mandated by Biggert-Waters, FEMA is chargedwith completing a study with the National Academy of Sciences toexplore ways to encourage/maintain participation in the NFIP,methods to educate consumers about the NFIP and flood risk, andmethods for establishing an affordability framework for the NFIP,including implications of affordability programs for the NFIP andthe federal budget.

The hearing was demanded by Louisiana's two senators, Democrat.Mary Landrieu and Republican David Vitter. They say the rate hikeswill have a severe impact on those who live in coastal areas oftheir state, and ask that the rate increases be delayed untilaffordability studies are completed and the accuracy of maps beingused to set new rates is ascertained.

But supporters of the law asked the senators attending themeeting to hang tight. In a statement submitted at the hearing,Jimi Grande, senior vice president of federal and political affairsfor the National Association of Mutual Insurance Companies, saidthat in those cases where assistance is truly needed, NAMICsupports providing assistance – on a means-tested basis – for thoseproperty owners who truly cannot afford the new rates.

“It is important, however, that any assistance to low-incomehomeowners should be fully transparent and not hidden as suppressedpremiums that leave the homeowner blind to the actual risk theyface from flood and the NFIP underfunded,” Grande said.

Steve Ellis, vice president of Taxpayers for Common Sense, addedthat “it is important to recognize that policyholders are not beingdenied the ability to purchase flood insurance.”

He said Biggert-Waters “simply eliminates the subsidizedrates.”

“In reality, the biggest shift will be that second homes andbusinesses that used to claim 38% of the subsidized policies willnow represent only 1.5% of the total,” Ellis said.