[background noises] the committee will come to order. Take two. Thank you for being here today. I will not recognize myself for five minutes for the purposes os questioning the witness. Flood insurance is an issue is an important impact on my district in indiana. Arwhile we are firmly in americs heartland and have no risk of flooding froms, hurricanes, much of indianas ninth district sits along the ohio river running from aurora and Dearborn County anto walk new albany and along e river in harrison county. Indianas ninth district is also home to many creeks, ponds, lakes each of which can have a flooding impact on property, businesses and homes during times of heavy rainfall. Causing Property Damage and sometimes death. Just last september i was on the ground with the Indiana Department of Homeland Security for flooding that occurred in switzerland, jefferson in ohio counties in my district. Several years ago i worked for u. S. Senator dan coats and worked with stakeholders during the last map update. I want to say first i really appreciate the work of fema. Also one is working for senator coates i was on the ground for the tourney that hit indiana and worked with fema for about six months. They provided Excellent Service during that time so thank you. Many hoosiers face the threat of flooding the vast majority of properties in indiana lack Flood Insurance coverage, approximate 2. 5 Million Properties currently do not havenf coverage. The number of homes and businesses covered has also dropped in recent years. March 2021 there were 20000 leonard and i policies in place in indiana as of last october there were less than 17400 policies. A drop of more than 13 are over 2700 policies from just a year end a half prior. One reason why indiana has been dropping policies is due to cost for between 1978 and 2017 hoosiers paid over 440 million in premium to the receive lesson 290 million back. They paid 150 million more than they received. With inflation forcing americans to tighten their belts, their wallet, many cannot afford to pay these high premiums. Which in indiana as of 2018 average 993. It is not a unique issue to indiana. I have recently said that i appreciate we are looking at a modernization of the Flood Insurance program because it is not working in louisiana and its not workingba in indiana we probably need to find a way to fix some of the issues. My question is, while the implementation attempt to more accurately measure risk within the and fip, congress will stilling to work further on reforms to maximize the efficiency on the potential of the program put its likely end fip will never be able to provide protection against all floods in flood risks nationwide by itself. Do you support efforts to encourage more private insurance to enter the flood market to help lighten the load risk for and fip . On the private side help us close the Flood Insurance cap and so one of the provisions i mentioned earlier in the recommendationss is to let the current coverage come back. We think that will be certainly helpful. I think the other reforms that we are making also our beneficial for the private sector. Many times americans across the country faced the risk of flooding. I look forward to working on Meaningful Solutions to address this. Thank you. I yield back. Ms. Williams is recognized for five minutes. Thank you. We are in the middle of a housing crisis and i have constituents who cant afford of their mortgage or rent payment but today weoi are going to have another hearing on Flood Insurance for the second time instead of discussing how to lower housing costs in the district into the country. In the02 Fourth Quarter of 2022, rent in the area increased by 6. 4 compared to the Fourth Quarter of 2021. Since we have yet to focus any of s our time in the subcommitte on housing, Community Development and insurance figuring out how to increase the supply of Affordable Housing or dropdown home prices for the constituents, im not going to have the conversation today again about the need of reform to the national Flood Insurance program that would help those who manage to buy a house or rent an apartment keep their home should it flood. Atlanta is the largest racial wealth gap in the country and as i mentioned the space and skyrocketing costs in the Congressional District people who need Flood Insurance might not be able to afford it but if their homee floods like so many dead and the catastrophic flooding in 2009, which cost 500 million with of damage, we simply cant afford to not have it. Im very supportive of the administrations recommendations to create the means tested Assistance Program that would help will be at moderate income families afford Flood Insurance by offering a graduated discount benefit. Have they flushed out the particulars of the program for examplege what the discount percentagesou or the amounts wod look like and how much money people could save . Thank you for your support and for the question. To date, we have not actually developed the program. What weve outlined is a framework for the direction that we believe the program should be instructed to go by congress in developing the affordability framework so the details weve not o still working on it. In the march 10 hearing i asked one of the witnesses about selegislative solutions for addressing the Racial Disparities people of color face. Communities of color aree. More likely to be susceptible to flooding but not designated to special flood hazard areas. Additionally the urban institute found people of color are less likely to have Flood Insurance and if they do have insurance experience a higher rate of unpaid claims. Are they aware of and proactively collecting data on these disparities . That is no question that we need, what you described should not occur. We are working at making sure that all of our programs are based in equity. Its the priority of the administration. As i mentioned in the earlier question, as we look at how we can provide the data that is necessary for you to make policy decisions, if you have suggestions for us we will take those and try to do a better job providing the data that would be helpful. Id like to get back to you and work on exactly what information that you are looking for to see if we can deliver. I would like to hear more on the Data Collection and any additionalps steps to reduce the disparities and do you have any thoughts on what they are . Working to make sure they understand the unconscious bias and they treat every policyholder fairly. Thats critical. When i talk with the adjusters i suggest to them that they should handle that claim as well as if it were my mothers claim because we will have to have a discussion about it. That goes also for making sure that we treat everyone fairly. So if there are circumstances where thats not happening i want to go about it. Thank you. Last congress we took steps to improve stormwater infrastructure protecting and the marginalized communities addressing the threat posed by more frequent extreme weather events caused by climate change. While much more needs to bete done, this is important in the mitigation. Since efforts are included in the assessment, housing efforts they are effected inn a coupe of different ways. One, as they are reflected in the communities Flood Insurance rate map they are reflected there, they areap picked up in e modeling and experience of the capacity modelers when mitigationst activities occur those benefits are a part of the catastrophe model. So we are looking at making sure that the mitigation efforts are and continue to be recognized in the program because when we talk about flood Property Owners need, we talk about the need for insurance and about the need for mitigation. Its a twopronged approach that we need to take. Thank you. My time is expired, and i yield back. The gentleman from new york is now recognized for five minutes. Thank you madam chair, thank you for being here today and addressing the questions and concerns. As you mentionedon in your openg statement, my district like many acrossss the nation have seen me frequent and intense flood events occurring in recent years into this is likely to continue. These are threats that will cost american homeowners, renters and businesses billions of dollars in the near future. Its an important topic despite that fact this will mark the first appearance by this committee in over six years going back to march of 2017. So i want to commend chairman david is in for having this hearing and making the effort to restore the committees oversight of the program. We can see that these important issues are being examined. The Government Accountability office has observed that they have two competing goals. Keeping Flood Insurancein affordablece and keeping the program fiscally solvent. The balance between the two goals would appear to be especially difficult at the moment. While inflation is at a 40 year highend americans are dealing with affordability crisis, the implementation of the risk rating 2. 0 lead to increases in premiums for millions of americans. Weor have heard reports of premiums in new york nearly doubling increasing from 1,184 to 2,197 on average. When contemplating those two objectives, how does fiona attempt to strike a balance between them . First of all thank you for the question. And certainly there are competing interests within the program that we are working hard to make sure we balance. Making premiums reasonable and be riskbased actuarially sound can happen and thats what our program has done. Theres some misconception out there that the new pricing methodology increases thenc amot of premium dollars the program needs. And thats not the case. We would have needed to collect the same amount from all of our policyholders in the legacy system that we now collect under the new rating methodology. Now we base that premium on actual risk characteristics of the property instead of those owned thatat property has happes to be located in. Second, another piece of the neo methodology thats not wellrecognized is new policyholders come into the program and full risk rate. They no longer come in from a discount rate subsidy so the doubling of the insurance cost that you mentioned isnt for the currentur policyholder. The current policyholders premium can only go up statutorily required 18 . New Property Owners have to pay the full risk rate. The third point that i would make is that for the first time the program is actually able to tell policyholders and Property Owners with the fully risk is. Couldnt do that before. So, now folks understand that at some point the rates are going go from 1,500 to 3,000 but they are going to go at 18 , but the number of knowing what it is thats got people concerned rightfully because now they know what the full risk is and they canhe take steps to mitigate. Can you speak to what reforms would help h grow awareness of e need for Flood Insurance and encourage more americans to be covered either through the nfib or the private market weve seen over in europe certain programs and advertisements try to encourage but what are we doing here in the United States to encourage people . There is no question flood risk is underappreciated across the country so we can allci do a better w job of making sure peoe understand the peril associated with floods and the reason why thatat Financial Security of the policy is so important but we dont work on this alone. Its not just fema. We work with the 48 that administer the program on behalf of us. We rely on them to do their part to make sure people understand the flood risk and we work with community members, the 4,000 communities that participate in the program toe try to provide them the information and many of them do their own campaigns and many commissioners try to raise flood awareness. He so theres no question that we need to do a better job making appreciate. The gentlemans time is expired. The gentlewoman from texas is recognized for five minutes. Thank you madam chair and for being with us today to bring us an update on the Flood Insurance program. I represent the houston area, and as our Ranking Member has mentioned, we have a lot of flood prone areas and have had numerous 500 year events both flooding att rain events. The biggest priority for me as of course accessibility and affordability. The area it self was hit by Hurricane Harvey in 2017 and cost about 125 billion in damages in over 100ve deaths. Thats about four times your authorization of 30 billion. In the greatestli scenario there are over 332,000 initial properties and designated floodplains and some have sustained substantial flooding and will by 2015. Research also shows that the communities are more at risk for flooding in the houston area as a result of our discriminatory housing policies. For many people in my district, they really cannot afford the insurance. That is the biggest barrier and its also true for most of the minoritye communities in fact some of the distribution of our dollars have been challenged as unfair and with disparate impact on the d minorities. Because my district is 77 latino and large workingclass, we haves, found that the biggest challenge we have is a lot of rentals, and a lot of older populations that own homes and cant afford the insurance. I heard your response to my colleague that you are still working on it and i just i wanto implore i heard the same answer the last time. Its been over a year at least since ive been here to ask some of these questions. What is it thats keeping you going from putting this to make it more affordable and accessible . I just dont understand why we keep getting the same answers. We do not have the Statutory Authority to develop a program that bases the premium on ones income, which is why it is one of our 17 recommendations that is so important with not only making sure people that need the coverage in the areas that you described that we can develop a program that works for all americans. So its simply we dont have the authority right now to develop that program. If we could what would it look like . And your answer was we are still looking at it. If i said we are still looking at it then i misspoke. What we dont have is the details. We have it written in the regulation. We dont know all of the eyes and tees crossed so what we have said is we are proposing to develop and Affordability Program that if you are at 100 of the outreach in your area you would start to receive premium assistance, not your whole home premium paid about assistance. And as your income goes down to 60 is the average mean income in your area you would receive more of a discount than the moderate income individual at the beginning of the program. Youre looking at what it be based onon for example we are flood prone. Montana may not so can you look at regional considerations and considerations for as the chairwoman mentioned california getsit hit by fires and floods. Mostly floods and rain and hurricane. The flood risk in every state is certainly different than we now recognize now but 98 of counties across the country have had a flood event so flooding can happen anywhere that it can rain so we want to work with you to make sure that we have awareness needed to a make sure that low income people understand they need the protection but then also work with youor to get the proposal n place so that we can design the program that is going to do so much good. I would hope with all due respect to the next timee we hae you here we dont hear again. The time is expired. Thank you and i yield back. Mr. Torres is recognized for five minutes. Thank you, chair. I represent the lowest income Congressional District in america, low income americans are hit the hardest by the crippling cost of the national Flood Insurance program. Under 2. 0, the raising premiums by as much as 18 a year for as long as ten years and a female would be raising premiums even higher than 18 were it not for the statutory cap that congress put in place several years ago and so and Even Stronger cap as needed to protect the lowest income families from rapidly buying Flood Insurance payments. You brought up earlier the notion ofar calculating the premiums in light p of income. When it comes to housing, the threshold for affordability is 30 . No one should pay mores than 30 of their income toward their rent. What would be the threshold when it comes to Flood Insurance policies . So, the program that we designed and the administration supports and we recommended it doesntn look at, looks at it from the average Median Income of the property owner. The affordability framework that we developed actually outlined a number of ways that you could develop and Affordability Program so we are certainly willing to look and have a conversation with you if theres a different manner in which we can provide this muchneeded. Is that something, that you would study what would constitute an affordable percentage . Myuh sense would be im not an expert in that. Thats the approach we take with Affordable Housing so why approach it differently with respect to Flood Insurance . We looked at the most effective way in our opinion is what we proposed. We certainly look at different ideas if you have them. If you live in a special flood hazard area and have a federally backed mortgage and are required to have Flood Insurance but not every person lives in a special flood house area with a federally backed has Flood Insurance do you track the noncompliance and if so what is the number of people that fall into that . So, we dote not. That is actually a lender requirement, not so we dont track those numbers. I think theres been some study done on it we could provide the information that we have but the lenders would have that information. Im assuming the more participants in the program the more financiallyro sustainable . Actually from the entrance perspective it depends where thl policyholders are so its not as simple. A sense of where it is breaking down . I dont know that the enforcement has broken down so i cant comment. Judging by the noncompliance i would think to suggest to break down and enforcement if there is a new methodology ive heard complaintss that the new methodology for calculating premiums is largely known only to insiders that its opaque to the rest of us particularly state and local governments. Are there any plans to make the methodology for calculating premiums more accessible and available to the public and current stakeholders . So the rating methodology that we developed for the first time that reduced in million policyholders premiums on average 60 a month, we provided that methodology publicly already. We also provided premium calculation worksheets and apr number of other tools on our website that agents and companies have. Do you feel like there is sufficient transparency . I believe that we have been very transparent. Otherwise do you know why people are under the impression that your method is insufficiently insufficient . I think weve done a good job ofof providing all the informatn someone in need. So what is the endless understanding . Gao will be issuing do you have a sense of where is the misunderstanding . Because there seems to be a common complaint that ive heard that there is a lack of transparency around your methodology and you seem to be claiming otherwise. I want to understand where the breakdown in communication of the understanding is. I dont know. Would wantething i to explore. Well the program be solvent if the federal government paid the debt associated with katrina . The program is backed by the full faith of the u. S. Treasury now so. With the program historically has been sustaining, self financing, would you be actually it has not been. The very nature of the catastrophic program indicates that it would be very to ever if for us not impossible for us to ever be felt. The gentlemans time is expired. I would like to thank the witnesses for his testimony today. Without objection all members will have five legislative days to submitch additional written questions for the witness, to the chair that will be forwarded to the witness for his response. Ihe asked the witness to please respond as promptly as you are able. This hearing is adjourned. [inaudible conversations] the madison prize constitutional
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