Legislation was introduced Tuesday in both the House and Senatethat, as expected, would effectively delay for perhaps four yearsmost flood insurance rate increases mandated by a 2012 lawreauthorizing the National Flood Insurance Program.

Despite the fact that the sponsors resisted initiatives by somemembers of Congress to delay increases proposed for second homesand businesses, an insurance industry trade group, a coalition ofsupporters of comprehensive catastrophe abatement policies and aconservative think tank immediately said they would oppose thelegislation.

Sponsors of the bills seeking the delay (NAFCUis among those calling for it.) face other hurdles. Forexample, they either propose ways to offset the cost to the U.S.budget deficit or obtain a waiver of those budgetary rules. Theamount of the required funds will have to be set by theCongressional Budget Office.

They are also acting against the background of the fact that, asa result of Sandy and Katrina, the NFIP owes the Treasuryapproximately $24 billion—and that amount is likely to rise ashomeowners impacted by Sandy appeal to get more funds thanauthorized to rebuild their homes or businesses.

The National Association of Mutual Insurance Companies said thedebt is now $28 billion.

The primary sponsors in the Senate are Robert Menendez (D-N.J.)and Johnny Isaakson (R-Ga.) It has eight other Senate co-sponsors.The bill is the Menendez-Isakson “Homeowner Flood InsuranceAffordability Act.” Companion legislation is being introduced atthe same time in the House. Chief sponsor of the House bill is Rep.Maxine Waters (D-Calif.), Ranking Member of the House FinancialServices Committee. A total of 81 other members of the House alsosigned on.

Menendez and Isaakson said the bill delays the “most dangerousrate increases under the Biggert-Waters Act until FEMA proves itsflood maps are accurate and understands the impacts these drasticrate increases will have on individual policy holders and theprogram at large.”

They said the legislation “is about fairness and building afuture our communities can count on.

“Our coalition of business groups, non-profits, local leadersand bipartisan members of congress continues to grow every day andwe will keep pushing until this bill becomes law,” Menendez andIsaakson said.

However, the National Association of Mutual Insurance Companiessaid the bill is a bad idea and suggested as an alternative thatCongress could further ease the transition to risk-based rateswithout damaging the NFIP simply by moving from the hidden subsidyof suppressed rates to a transparent one provided to homeowners ona means-tested basis.

“It's understandable, from a political perspective, that electedofficials don't want to be seen as the reason for higher floodinsurance premiums, and no one wants to see homeowners face a truehardship,” said Jimi Grande, senior vice president of federal andpolitical affairs for NAMIC.

“At the same time, however, there are millions of policyholderswho rely on the NFIP for flood insurance and who deserve a programthat will be able to meet its obligations,” Grande said.

“As it stands, that cannot be said of the NFIP, which owesroughly $28 billion to the taxpayers and is why these reforms werepassed in the first place. Delaying the reforms adopted under theBiggert-Waters Act means a return to the days of the NFIP needingtaxpayer-funded bailouts,” Grande said.

SmarterSafer.org – a coalition of environmental groups, taxpayeradvocates, insurers, and housing and mitigation organizations –said that the delays proposed in the bills would “essentially gut”reforms to the NFIP and put its financial stability in danger.

It instead suggested several “common-sense measures” that wouldmake these reforms work better for those with real needs “whilecontinuing to shore up the finances of the NFIP. Delaying would bea mistake and should be avoided at all costs.”

The R Street Institute, a conservative think tank, said that theGovernment Accountability Office has determined that 78.8% ofsubsidized policies are in counties that rank in the top 30% ofhome values, while less than 1% are in counties that rank in thebottom 30%.

“Delaying the scheduled phase-out of flood insurance premiumsubsidies amounts to a gift to mostly wealthy homeowners who get toenjoy cheap insurance on their beach homes thanks to taxpayersupport,” said R Street Senior Fellow R.J. Lehmann.

”It's important that flood map designations reflect therisk on the ground as accurately as possible, and to that end, wethink it is important that FEMA's maps account for all floodprotection systems, including those state and local levees thathave not been certified by the Army Corps of Engineers,” Lehmannsaid.

A federal lawsuit seeking an injunction against the rate hikeshas been filed in Mississippi by that state's insurance commissioner.Louisiana is filing a friend of the court in the case, and Florida,and, likely Alabama, are drafting similar briefs.

A hearing on suit is likely before Thanksgiving, MississippiInsurance Commissioner Mike Chaney said.