Flood insurance rate increases may be delayed if the US Senate approves a massive government spending bill. This may scupper or delay hopes that new US flood risks can be brought into the private market.
Commenting on the development, Lawrence Mirel, partner at law firm, Nelson Levine de Luca & Hamilton said that while property owners are “alarmed at the prospect of sharp increases” in flood insurance pricing and their elected representatives have understandably responded, if owners don’t pay for the risk taxpayers will.
Mirel says: “By slowing down the Biggert-Waters reforms, Congress will ensure that taxpayers will continue to subsidise property owners at risk of flooding. Major rethinking and restructuring of the program is needed if it is to survive.”
Speaking with Brad Kading, president and executive director of the Association of Bermuda Insurers and Reinsurers in Boston at the end of last year, he warned that Congress might move to block measures.
He said that Biggert-Waters had been a "positive step towards sustainability" for the federal flood program, but warned that rate increases might prove greater than anticipated, tempting some in Congress to derail the act.
Kading said that re/insurers were looking for freedom of rate and form. The latest moves by government suggest that such freedom may be a way off.
Flood reform, US, Nelson Levine, ABIR