Members of the PIA of Louisiana met with members of their congressional delegation earlier this week to discuss the risk rating methodology, known as Risk Rating (RR) 2.0, now being used by the National Flood Insurance Program (NFIP) and its effect on communities around Louisiana. PIA of Louisiana also highlighted the need for a long-term NFIP reauthorization that includes necessary reforms. These meetings took place as part of PIA’s rolling year-round 2022 Advocacy Days.
PIA of Louisiana spent much of their meetings offering policymakers a glimpse into the challenges posed by FEMA’s implementation of RR 2.0. PIA supports RR 2.0 because it assigns premium rates to individual properties using substantially more granular data than the legacy system. The new factors align an individual property’s rate more closely with its actual level of flood risk.
RR 2.0 was implemented as to all new policies and some existing policies this past October 1. Remaining renewals will transition to RR 2.0 beginning with policies subject to renewal on April 1. From that point on, all NFIP policies—renewals and new business—will be priced using the new methodology. In their meetings, the PIA of Louisiana members described their continued frustration with aspects of the RR 2.0 rollout, as well as the need to improve the experience for both agents and consumers. They highlighted the lack of transparency associated with the new rating methodology and explained how the rating engine’s opacity affects their clients.
PIA of Louisiana members also urged their policymakers to pass a long-term reauthorization of NFIP that includes necessary reforms, as laid out in PIA’s current Issues of Focus. The agents emphasized that any long-term reauthorization of the NFIP must maintain the current Write Your Own (WYO) reimbursement rate and cautioned that a reduction in the rate would likely prompt prohibitively costly cuts to NFIP agents’ commissions. PIA has strongly opposed past efforts to reduce the reimbursement rate and will continue to do so.
PIA looks forward to continuing to work with the Louisiana congressional delegation on vital issues related to the NFIP, including Risk Rating 2.0, and flood insurance more broadly.