Congressman Steve Scalise blasted the Federal Emergency Management Agency on Monday for its “lack of transparency” in setting flood insurance rates under the overhaul that began rolling out last year.
In remarks following a closed-door meeting with several parish presidents, Scalise accused FEMA of jumping the gun on implementing changes to the National Flood Insurance Program, a process known as Risk Rating 2.0. He said the agency has admitted to having only a fraction of the nation’s levees accounted for in its rate-setting algorithm.
The Metairie Republican, who serves as the second ranking Republican in the House, said FEMA’s unwillingness to explain its methodology to levee officials charged with protecting communities against flooding is also unacceptable.
“We’ve had people that actually build levees, people that understand engineering and hydrology, who have pointed out flaws in how FEMA came to these decisions, and FEMA won’t even meet to discuss with them what the rationale was behind Risk Rating 2.0,” Scalise said.
The overhaul aims to have the NFIP set rates in line with actuarial practices used in the private sector, which would help the program address its roughly $20 billion debt.
That means evaluating the risks of each individual home rather than using the old system, which was largely based on FEMA’s flood maps. A wide range of factors, including rebuilding cost, distance to water and elevation, are fed into a complex algorithm that calculates premiums.
FEMA defends it by saying it will be fairer for all, doing away with a system that resulted in older, modest homes essentially subsidizing premiums for newer, pricier beachfront houses.
On Monday, officials from several coastal parishes joined Scalise in criticizing FEMA for failing to explain in detail how it is setting rates.
“What is in the algorithm? How are you coming up with these rates for our residents?” asked Lafource Parish President Archie Chaisson.
FEMA has released limited data on the increases, providing only first-year numbers under the new system. Because increases are limited to 18% annually, that masks the overall impact. Those annual increases will continue until homeowners reach their “target” rate under the new system, compounding dramatically over time in some cases.
The Times-Picayune | The Advocate, through a public-records request, obtained FEMA’s projections of Louisiana’s “full risk premiums.” They show that Louisiana homeowners will eventually see 122% increases on average under Risk Rating 2.0, phased in over multiple years.
Still, even with the staggered increase, homeowners are feeling the squeeze.
Jefferson Parish President Cynthia Lee Sheng said she was told Monday that around 3,000 homeowners in her parish have dropped their flood insurance since renewals started going out in April.
“I think what our citizens are looking for in each of our parishes are answers,” said St. Tammany Parish President Mike Cooper.
“Heretofore, we’ve had flood insurance maps that citizens and home builders and developers and realtors could look at and determine what their flood insurance rates would be. They cannot do that at this point,” he said.
Staff writer Mike Smith contributed to this report.