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HYDE-SMITH, WICKER & CASSIDY WANT GAO STUDY OF NEW FLOOD PROGRAM TO INCLUDE KEY INFORMATION
Senators Issue Letter to GAO Regarding Facts & Data Needed to Assess FEMA’s Troubled NFIP RR2.0 Program
WASHINGTON, D.C. – U.S. Senator Cindy Hyde-Smith (R-Miss.) today issued a letter she led with U.S. Senators Roger Wicker (R-Miss.) and Bill Cassidy, M.D. (R-La.) that seeks to ensure the U.S. Government Accountability Office (GAO) considers key facts and data in any legitimate assessment of the methodology used to develop the National Flood Insurance Program’s Risk Rating 2.0 (RR2.0).
Addressed to GAO Comptroller General Gene L. Dodaro, the lawmakers’ letter criticizes the Federal Emergency Management Agency (FEMA) for its continued lack of transparency in developing and implementing RR2.0 and outlines specific questions that should be answered to produce a thorough study of the program.
“A third-party study of Risk Rating 2.0 may be useful if appropriately scoped, but it cannot be a substitute for FEMA making the method totally transparent and implementing it under the rulemaking process of the Administrative Procedure Act,” the Senators wrote.
“We request that the following be included as one of the major questions to be examined in the GAO study: ‘To what extent is Risk Rating 2.0 actuarially sound and transparent?’ Our concern lies in that the study as designed might resolve the question of ‘actuarial soundness’ into an examination of whether Risk Rating 2.0 is ‘doing what actuaries do,’” they continued.
The Senators also express ongoing and growing concerns about the higher premiums levied on policyholders, which will result in an estimated 20 percent dropping their NFIP coverage. They also question the fiscal soundness of FEMA plans to address the affordability issue.
“A complete study of Risk Rating 2.0 needs to address these discrepancies between affordability and fiscal balance. We would prefer to have enough transparency in this program to face this reality now in order to adopt flexibility with respect to actuarial niceties, and design a program that balances affordability with other objectives,” the Senators wrote.
The letter to Dodaro was accompanied by a related July 2022 letter signed by seven Senators to FEMA regarding the methodology used in developing and implementing RR2.0 and its implications on reauthorizing the troubled federal flood control program.
The full letter sent to Dodaro is available here.
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