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Cmte Financial Services (R)
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Davidson Delivers Remarks at Hearing on the Reauthorization of the National Flood Insurance Program
Washington, Apr 28 -
Today, the House Financial Services Subcommittee on Housing and Insurance, led by Chairman Warren Davidson (OH-08), is holding a hearing entitled “The Reauthorization of the National Flood Insurance Program: FEMA’s Perspective.”
“Today’s hearing is entitled ‘The Reauthorization of the National Flood Insurance Program: FEMA’s Perspective’ where we will receive testimony from Mr. David Maurstad, who is the Assistant Administrator for FEMA’s Federal Insurance Directorate and the Senior Executive of the NFIP. “Mr. Maurstad, thank you for appearing today for the second hearing of the Housing and Insurance Subcommittee for the 118th Congress. “FEMA plays a vital role through their disaster recovery efforts, and today we will explore its management of the National Flood Insurance Program (NFIP), which has existed for over 50 years and until recently has operated in the same manner and relied upon the same outdated tools as it has since its creation. “Flooding in the United States is a significant and costly problem for both coastal and inland residents. Unfortunately, there is only one provider for nearly all residential flood insurance, the government backed NFIP, which sells roughly 93 percent of all residential flood coverage in the country. “That’s not just a bad idea from the perspective of creating a workable insurance model, it has also proved to be a costly one for taxpayers. To date, the program finds itself $20.5 billion in debt even after Congress outright forgave $16 billion just a few years ago. “It seems clear to me that the program is in desperate need of reform, and that process needs to start right here with the NFIP’s committee of jurisdiction, Financial Services. “But lately, the Committee has not been too involved in the oversight or ongoing operations of the program – today is the first time we have heard from FEMA on the NFIP in over 6 years. “That’s just not going to get it done if we are serious about modernizing a program that was created before the original moon landing. “This Committee has an important role to play in its oversight of the NFIP, and it is through hearings like this that Congress and the public can identify whether the program is operating in an effective and transparent manner. “But we have recently been MIA from that job as the previous majority left the program on autopilot through a series of short-term extensions on Appropriations bills for the last four years. “That not only removed us from the process, it also made the program vulnerable to uncertainty for its 4.7 million policyholders. “We can do better than that and we have to. “To ensure stability while Congress does the important work of reforming the program on a long-term basis, I’ve introduced H.R. 1392, the NFIP Extension Act of 2023, which would reauthorize the program through December 2024. “This bill would not only avoid a lapse in coverage, but it would also give this Committee the time and deadline-freedom it needs to do a deep dive into flood insurance reforms, conduct additional hearings on the NFIP, engage stakeholders, and craft a new 5-year reauthorization bill with reforms. “This work is crucial and will ensure this program is moving in the right direction for taxpayers and policyholders alike, particularly given FEMA’s recent internal work to incorporate industry best practices and technology into its management of the NFIP. “That includes its most notable work regarding the adoption of its new Risk Rating 2.0 methodology, a transformative initiative to modernize how it accurately measures flood risk. “Risk Rating 2.0 is a good first step in moving towards long-term financial visibility for the NFIP, and one that certainly deserves our attention to ensure this program can serve communities most at risk of flood events and remain viable in the years to come. “I look forward to exploring it and FEMA’s other recent modernization efforts with Assistant Administrator Maurstad so we may develop a set of policy recommendations for Congress on reforms that will set this program on a sustainable path. “With that, I thank our witness for his testimony today and look forward to the conversation.” ###
Watch Chairman Davidson’s opening remarks here.
Read Chairman Davidson’s opening remarks as prepared for delivery: