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S. HRG. 112–698 

THE NATIONAL FLOOD INSURANCE PROGRAM: 

THE NEED FOR LONG-TERM REAUTHORIZATION 

AND REFORM 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC POLICY 

OF THE

COMMITTEE ON 

BANKING, HOUSING, AND URBAN AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

ON 

EXAMINING THE NEED FOR LONG-TERM REAUTHORIZATION AND 

REFORM OF THE NATIONAL FLOOD INSURANCE PROGRAM 

MAY 9, 2012 

Printed for the use of the Committee on Banking, Housing, and Urban Affairs 

( 

Available at: http://www.fdsys.gov/ 

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS 

TIM JOHNSON, South Dakota, Chairman 

JACK REED, Rhode Island 

CHARLES E. SCHUMER, New York 

ROBERT MENENDEZ, New Jersey 

DANIEL K. AKAKA, Hawaii 

SHERROD BROWN, Ohio 

JON TESTER, Montana 

HERB KOHL, Wisconsin 

MARK R. WARNER, Virginia 

JEFF MERKLEY, Oregon 

MICHAEL F. BENNET, Colorado 

KAY HAGAN, North Carolina 

RICHARD C. SHELBY, Alabama 

MIKE CRAPO, Idaho 

BOB CORKER, Tennessee 

JIM DEMINT, South Carolina 

DAVID VITTER, Louisiana 

MIKE JOHANNS, Nebraska 

PATRICK J. TOOMEY, Pennsylvania 

MARK KIRK, Illinois 

JERRY MORAN, Kansas 

ROGER F. WICKER, Mississippi 

DWIGHT FETTIG, Staff Director 

WILLIAM D. DUHNKE, Republican Staff Director 

DAWN RATLIFF, Chief Clerk 

RIKER VERMILYE, Hearing Clek 

SHELVIN SIMMONS, IT Director 

JIM CROWELL, Editor 

SUBCOMMITTEE ON ECONOMIC POLICY

JON TESTER, Montana, Chairman 

DAVID VITTER, Louisiana, Ranking Republican Member 

MARK R. WARNER, Virginia 

KAY HAGAN, North Carolina 

TIM JOHNSON, South Dakota 

ROGER F. WICKER, Mississippi 

MIKE JOHANNS, Nebraska 

ALISON O’DONNELL, Subcommittee Staff Director 

BETH COOPER, Professional Staff Member 

TRAVIS JOHNSON, Republican Subcommittee Staff Director 

(II)

C O N T E N T S 

WEDNESDAY, MAY 9, 2012 

Page 

Opening statement of Chairman Tester ................................................................ 1 

Opening statements, comments, or prepared statements of: 

Senator Vitter ................................................................................................... 11 

WITNESSES 

Todd Klietz, Missoula County Floodplain Administrator, Missoula, Montana .. 3 

Prepared statement .......................................................................................... 25 

Dwayne Bourgeois, Executive Director, North Lafourche Conservation, Levee, 

and Drainage District, Raceland, Louisiana ...................................................... 5 

Prepared statement .......................................................................................... 26 

David A. Sampson, President and Chief Executive Officer, Property and Casualty Insurers Association of America ............................................................... 12 

Prepared statement .......................................................................................... 63 

Jon Jensen, Government Affairs Committee Chairman, Independent Insurance Agents and Brokers of America, and President, Correll Insurance 

Group .................................................................................................................... 13 

Prepared statement .......................................................................................... 65 

Moe Veissi, 2012 President, National Association of Realtors ............................. 15 

Prepared statement .......................................................................................... 68 

Sarah Murdock, Senior Policy Advisor, The Nature Conservancy ...................... 17 

Prepared statement .......................................................................................... 75 

ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD

Prepared statement of the American Insurance Association ............................... 80 

Prepared statement of the Mortgage Bankers Association .................................. 83 

Prepared statement of the National Association of Mutual Insurance Companies ........................................................................................................................ 87

Prepared statement of the American Bankers Association and the American 

Bankers Insurance Association ........................................................................... 91 

Prepared statement of the Council of Insurance Agents and Brokers ................ 95 

Prepared statement of R.J. Lehmann, Deputy Director, Center on Finance, 

Insurance, and Real Estate, The Heartland Institute ...................................... 97 

Letter submitted by Bill Cheney, President and Chief Executive Officer, Credit Union National Association ............................................................................. 104 

Letter submitted by James W. Tobin III, Senior Vice President and Chief 

Lobbyist, National Association of Home Builders ............................................. 106 

Letter submitted by Franklin W. Nutter, President, Reinsurance Association 

of America ............................................................................................................. 107 

Letter submitted by SmarterSafer ......................................................................... 109 

Letter submitted by James Bradley, Senior Director of Government Relations, 

American Rivers ................................................................................................... 111 

FIRM map and notice submitted for the record .................................................... 113 

(III)

(1) 

THE NATIONAL FLOOD INSURANCE PROGRAM: THE NEED FOR LONG-TERM REAUTHORIZATION AND REFORM 

WEDNESDAY, MAY 9, 2012 

U.S. SENATE, 

SUBCOMMITTEE ON ECONOMIC POLICY, 

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS, 

Washington, DC. 

The Subcommittee met at 10:04 a.m., in room SD–538, Dirksen 

Senate Office Building, Hon. Jon Tester, Chairman of the Subcommittee, presiding. 

OPENING STATEMENT OF CHAIRMAN JON TESTER 

Chairman TESTER. I want to welcome everyone, and I call to 

order this hearing of the Economic Policy Subcommittee titled ‘‘The 

National Flood Insurance Program: The Need for Long-Term Reauthorization and Reform.’’ Oh, how we long for the day. 

I look forward to hearing from our witnesses this morning about 

the importance of long-term reauthorization and reform of the National Flood Insurance Program, which is vitally important to Montana homeowners and communities. Given the fast-approaching 

May 31st expiration of the Flood Insurance Program, the need to 

reauthorize and reform this program is imperative. Without an extension, in a matter of weeks policyholders and insurers will be in 

limbo; realtors and homeowners will be forced to put closings on 

hold contingent on reauthorization of this program. 

We have been down this road before and have seen how unproductive and destructive lapses of this program can be. The unprecedented flooding in the Mississippi River basin last year further 

drove home the necessity of passing a long-term reauthorization 

that offers Americans and Montanans certainty in the face of risk. 

Senator Vitter and I have been working together on this issue for 

quite some time now. He has been a great partner and dogged in 

his efforts to ensure that the NFIP program does not continue to 

suffer from the same lapses that we saw in 2010. I appreciate his 

sponsorship of S. 2344, a short-term extension of the program 

through the end of this year, which I joined as a cosponsor to ensure that we do not fall into a lapse on June 1 and that we can 

continue our work on a long-term reauthorization bill. 

Teaming up on recommendations to improve the Senate Banking 

Committee draft, Senator Vitter and I worked with the Committee 

to incorporate critical provisions in the final bill. These provisions 

include a requirement that the Army Corps and FEMA work toVerDate Nov 24 2008 11:15 Apr 25, 2013 Jkt 048080 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 L:\HEARINGS 2012\05-09 AM ZDISTILLER\50912AM.TXT JASON
2 

gether to develop common standards that would allow existing 

Corps certification activities to meet FEMA levee certification criteria and a lengthening of the phase-in period for homeowners who 

must purchase flood insurance as a result of being mapped into a 

floodplain. 

Unfortunately, too many Montana communities have experienced 

what happens when FEMA and the Army Corps do not work together. I am especially pleased to hear from Todd Klietz this morning, who will discuss his experience in Missoula with levee certification. In addition to these important provisions, the flood insurance bill also makes a number of important reforms to put the program on a more sound financial footing to protect taxpayers and to 

ensure long-term solvency of the program. 

The bottom line is that we need a long-term reauthorization and 

reform bill and we need it now. The House and the Senate have 

never produced long-term reauthorization bills as closely aligned as 

the two that we have before us today. I am also not sure whether 

we have had the same strong, broad, industry-wide support that we 

have now, evidenced by our witnesses here today, and the efforts 

of the Flood the Hill Coalition, and I want to thank everybody who 

has been a part of that and will be a part of that. 

And while we cannot take our focus away from passing a longterm reauthorization and reform bill, it is also clear that we will 

need a short-term extension in order to continue our work in getting the long-term reauthorization reform bill across the finish line. 

I look forward to hearing from all of our witnesses about the importance of this program and protecting communities from national 

disasters and protecting taxpayers. 

Senator Vitter is not here yet, so I think we will go right straight 

to the panel. When he shows up, we will get his testimony when 

appropriate. 

So I would like to welcome our witnesses, two folks who have 

spent quite a bit of time in the field, and I want to thank them 

for their willingness to testify this morning. We will start with Mr. 

Klietz, a Montana floodplain administrator for the city of Missoula 

and Missoula County, a role that he has served in since 2003. He 

is also a past chairman of the Association of Montana Floodplain 

Managers. He is a certified floodplain manager and also previously 

served as a floodplain administrator for Ravalli County, a bit south 

of Missoula. I want to welcome you, Mr. Klietz. 

We also have with us—and my French is not exceptionally good 

today, but I will do my best—Mr. Dwayne Bourgeois, executive director of the North Lafourche Conservation, Levee, and Drainage 

District, a role that he has served in since 2010. Mr. Bourgeois has 

significant experience in the area of emergency preparedness, developing new ways for employers and employees to communicate in 

the event of an emergency evacuation through his work developing 

Rally Point. Welcome, Mr. Bourgeois. 

Each of our witnesses will have 5 minutes for oral statements, 

and your entire written testimony will be a part of the record. Mr. 

Klietz, I would like you to start. 

3 

STATEMENT OF TODD KLIETZ, MISSOULA COUNTY 

FLOODPLAIN ADMINISTRATOR, MISSOULA, MONTANA 

Mr. KLIETZ. Thank you, Senator. On behalf of Missoula County, 

Montana, and the Association of Montana Floodplain Managers, I 

am honored to appear before you today to provide comment on the 

reauthorization of the National Flood Insurance Program. I respectfully urge this Committee to ensure that long-term reauthorization of the NFIP is enacted prior to May 31st. 

Over the past several years, I have witnessed the results that delayed and uncertain congressional action on reauthorization has 

caused within my community and my State. Property values, already having fallen due to the economy, fall further in the floodplain due to buyers’ uncertainty that Congress will provide homeowners with long-term flood insurance coverage. Real estate transactions have been delayed, and some have completely fallen 

through. 

Homeowners, many of whom already must sell their property at 

a loss, are forced to reduce their sales prices further. The small 

pool of local insurers that are willing to process flood insurance 

policies dwindles further as they become increasingly frustrated 

with the ever changing uncertainty the last several years of delayed short-term reauthorizations have caused. Floodplain citizens 

need to know that you have their back by reauthorizing the National Flood Insurance Program for the long term. 

This is not to say that we support reauthorization of the exact 

same Flood Insurance Program that has contributed significantly 

to our national debt. From my perspective, reform is correctly focused on the insurance side as the requirements for floodplain development within NFIP communities do work. Simply tour a participating community post-flood to see those results. My own community just experienced a 10-year flood last spring. Older homes 

built before FEMA mapping were destroyed while the newer homes 

right next door suffered virtually no damages. 

The commonsense reforms, including those that the Montana delegation and this Committee have put forward, must be included in 

the long-term reauthorization. The American taxpayer is increasingly unwilling to provide financial support for those who have 

time and time again received handouts post-flood who then do absolutely nothing to prevent future damages as they know Uncle 

Sam will be there check in hand to quite literally bail them out 

again. Many repetitive loss property owners within my community 

received FEMA checks last year. None have voluntarily chosen to 

mitigate their homes. 

Gone, too, are the days that the taxpayer will support those who 

knowingly choose to live in areas and in homes with severe flood 

risk. So we thank you for moving the NFIP away from overwhelmingly tax-subsidized premiums toward actuarially rated policies. I 

also want to thank you for your commitment to fund ongoing mapping so that communities in rural States like Montana will eventually be provided with detailed floodplain maps allowing our citizens 

to build homes constructed through means that minimize flood loss. 

I further appreciate the efforts that are being made regarding 

levees. Although the issuance of new FEMA floodplain maps for my 

community has been on hold for several years due to inconsistVerDate Nov 24 2008 11:15 Apr 25, 2013 Jkt 048080 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 L:\HEARINGS 2012\05-09 AM ZDISTILLER\50912AM.TXT JASON
4 

encies with how FEMA is mapping properties behind them and behind levee-like structures such as railroad beds, roads, and even 

interstate highways, my community was fortunate that the Army 

Corps of Engineers certified their levees. This makes sense as the 

Corps designed, built, and inspects them on a regular basis. My 

community’s experience with the Seattle District of the Army Corps 

of Engineers was exactly the way it should be. We asked, they 

came, and while we had some unexpected work that needed to be 

done, we did our job in maintaining those levees, and the Corps did 

their job in certifying them. Unfortunately, other Montana communities have been required to spend hundreds of thousands of dollars to certify the levees that the Corps designed, built, and already 

inspects. An unjustifiable burden on those communities and their 

residents, we are glad to see the Senate taking a proactive position 

to put the Federal responsibility for certifying Federal levees back 

where it belongs. 

The positive reforms that have been put forward are long overdue, and I applaud your efforts to make them happen. However, 

there remains one very important issue: 500-year floodplains. You 

have heard testimony regarding the losses that the NFIP incurs— 

the taxpayer incurs—when homes within 500-year floodplains are 

damaged. The Senate bill will ensure property owners will now be 

notified of the risk of living in a 500-year floodplain. The problem 

is that FEMA does not map 500-year floodplains. These areas are 

identified as ‘‘Shaded-X’’ on the floodplain maps, and in small 

print, the corresponding legend states that these actually are 

‘‘areas of 100-year flood’’ or ‘‘areas protected by levees from the 

100-year flood’’ or ‘‘areas of 500-year flood.’’ Until FEMA is actually 

required to map these Shaded-X areas based on actual topography, 

the maps simply cannot be relied on to determine if a building proposed in these locations is actually within the 500-year floodplain 

or will be inundated during lesser flood events. Last spring, I was 

in a Shaded-X 500-year home with a full walkout basement that 

was inundated during our 10-year flood. There are no Federal requirements for how that home should have been built, nor how 

that home should be mitigated to prevent future losses. There are 

no requirements that the property owner obtain flood insurance to 

ease the burden on the taxpayer. The property owners had received 

multiple checks prior to last year’s 10-year flood event, and they 

did so again last spring. 

I was in another flooded home. This one was built in the 100- 

year floodplain—with a basement. It should have never happened—and it did not happen on my watch—but it did. Although 

that home was not constructed in compliance with FEMA requirements, those property owners also received a check from FEMA. 

I sincerely appreciate the opportunity to appear before you today 

and would like to leave you with my own top three requests: 

Stop issuing subsidized flood insurance policies for new structures built after FEMA’s floodplain designation. Fortunately, as addressed in the Senate bill, the taxpayer will no longer be forced to 

subsidize insurance for those that choose to build in designated 

floodplains. 

Stop rewarding those who bring fill into the floodplain to protect 

their development at the expense of pushing those flood waters 

5 

onto their neighbors. FEMA encourages this practice by issuing 

Letters of Map Revision Based on Fill which completely removes 

the owner’s obligation to obtain flood insurance coverage and contribute to the National Flood Insurance Program. 

Finally, stop issuing FEMA floodplain maps without providing 

written notice to affected property owners. FEMA has the audacity—and the budget—to send notices to widows on fixed incomes in 

Bozeman and Missoula and across the Nation whose homes are nowhere near the floodplain which scares them into buying flood insurance. At the same time, FEMA does not have the budget or desire to send such notices to people that are actually in the floodplain. Thankfully, notification is now addressed in the Senate bill. 

These scare tactics are not. Even Missoula City Hall, located nearly 

a half-mile from the 100-year floodplain, received such a letter from 

FEMA. Targeting extremely low-risk properties may be good for 

the bottom line but is not what citizens expect from their Government. 

In closing, I sincerely thank this Committee and both Houses for 

pursuing significant reform and providing our citizens with longterm, confidence-restoring reauthorization. 

Thank you. 

Chairman TESTER. Thank you, Mr. Klietz, and I appreciate your 

testimony. We will get to some questions for both of you, but we 

will go to Mr. Bourgeois now for his testimony. Mr. Bourgeois? 

STATEMENT OF DWAYNE BOURGEOIS, EXECUTIVE DIRECTOR, 

NORTH LAFOURCHE CONSERVATION, LEVEE, AND DRAINAGE DISTRICT, RACELAND, LOUISIANA 

Mr. BOURGEOIS. Thank you, Senator Tester and Members of the 

entire Committee, for this opportunity to testify today. I am, as you 

mentioned, the executive director of the North Lafourche Levee 

District, a political subdivision of the State of Louisiana. However, 

I am here today representing a broader coalition of Government 

agencies, citizens, and businesses in the State of Louisiana who 

rely heavily on the National Flood Insurance Program. 

We commend the Committee for addressing the long-term reauthorization and reform of the National Flood Insurance Program. 

Further, we appreciate the opportunity to provide to you details of 

our current circumstance. Though particulars may vary, the situation we face today is typical for many areas in South Louisiana and 

across our Nation. 

Currently, we are working with FEMA—and I will add that the 

U.S. Senate and the House of Representatives have been actively 

working along with us—to reform a FEMA policy regarding the impact of nonaccredited levees during the Flood Insurance Study. We 

believe that you will agree that our issue clearly demonstrates the 

need for reform for the National Flood Insurance Program. However, we further believe that such reform is currently being complicated and made more difficult by the lack of a long-term reauthorization of the National Flood Insurance Program itself. Even 

the seemingly obvious need for reforms takes much effort and time 

in a program such as this. It is hard for everyone involved to work 

diligently through such a complicated issue with a looming expiration date set for the fate of the entire program. 

6 

Our issues began in mid-2009 when we received new flood maps 

in our area. It was immediately obvious to us that the maps could 

not possibly represent the true risk of flooding in our area because 

the flood zones shown in the maps had no correlation to any real 

world features. We began working through the appeals process 

with FEMA and were able to quickly identify the elements of the 

Flood Insurance Study that were causing the erroneous mapping as 

well as limitations of the process itself that would not allow the 

maps to more accurately reflect the threat of flooding in our area. 

Realizing that complete resolution of our issues would have to 

come from a change in FEMA’s policy and that this change would 

have to come from Washington headquarters of FEMA, we began 

to inform and work with our legislative delegation. In early February 2011, 27 Senators signed a letter to FEMA Administrator 

Fugate asking FEMA to discontinue the ‘‘Without Levees’’ policy. 

In March of 2011, Administrator Fugate announced that FEMA 

would begin developing a series of targeted modeling approaches to 

replace the ‘‘without levees’’ approach to identifying the risk of 

flooding behind uncertified levees. 

In December 2011, FEMA released for public comment a draft of 

their proposed revised approach. About this same time, FEMA did 

reveal to us that they were still working on details on how to address coastal levee analysis. They realized that some of the riverine 

methods developed would not be appropriate for coastal levees. 

Most importantly, in a collaborative reform process, they also 

agreed to meet with us on these specific issues. A small group from 

our local coalition met with FEMA’s technical staff in February of 

this year. When it came to producing more accurate flood maps, we 

were told by FEMA nothing was off the table. This was a very productive meeting, but we have a long way to go. As of today, FEMA 

has not released the results of their analysis of all the public comments they received. This is still very much a reform in process. 

So today we find ourselves working hand in hand with FEMA on 

meaningful reforms to their policy only to be met by another pending expiration of a short-term extension of the National Flood Insurance Program. Yet, the details I have provided today are a tremendous effort to resolve but a single issue within the National 

Flood Insurance Program. There are many more issues that can be 

corrected through cooperative reform and a long-term reauthorization of this vital program. 

The framework for some of the other required reform is already 

in the language of the bill. An example is the creation of a task 

force that will help local levee owners work more efficiently with 

the U.S. Army Corps of Engineers when trying to have their levees 

accredited for consideration in the National Flood Insurance Program. 

In conclusion, I would like to point out that ours is a working 

delta, the fruits of which are enjoyed by and enrich our entire Nation. From our freight transportation on the Mississippi River to 

our oil and gas and petrochemical industry to our abundant fisheries, not to mention tourism, jazz, and Mardi Gras, we simply 

must work and live within this delta. As such, the availability of 

federally backed, affordable, and financially stable flood insurance 

is of vital importance to our region and the entire Nation. All of 

7 

this can be provided with the long-term reauthorization and reforms being proposed. 

We thank you for this opportunity to share both our situation 

and our views on this important issue. We look forward to working 

with all of you to continue making these changes to the National 

Flood Insurance Program. 

Chairman TESTER. Well, I want to thank you for your testimony 

also, Mr. Bourgeois. 

I think what we will do is we just go right into the questions, 

if I might. I am going to start with you, Mr. Bourgeois. One of the 

last statements you made was you have a working delta and how 

critically important it was to have a financially stable Flood Insurance Program. I do not know if you have had a chance to look at 

the bill in depth, but does it meet that criteria? 

Mr. BOURGEOIS. I have not read it completely in total depth, but 

I am familiar with it and familiar with the fact that we have gone 

through a series of short-term reauthorizations and how difficult 

that was to us. 

I will put this to you simply. Yesterday I had a revelation eating 

lunch at a deli, and I had a bag of chips that had the same expiration date as the National Flood Insurance Program. A program as 

important as this should not have the same expiration date as a 

bag of chips. 

[Laughter.] 

Mr. BOURGEOIS. It just floored me, and I wanted to bring it in 

because I did not think anybody would believe me. But those are 

the problems we are having. I mean, how can anyone make meaningful reforms, how can you plan long term, when we are faced 

with these constant short-term things? We need a solid commitment to the program so that everybody can move on and do what 

they need to do. 

Chairman TESTER. And predictability comes with that long-term 

commitment. 

Mr. BOURGEOIS. Absolutely. 

Chairman TESTER. Yes, thank you. 

Mr. Klietz, I want to thank you for being here this morning. We 

both know how long a trip it is from Montana to Washington, DC, 

so I appreciate your willingness to be here and to share your expertise on the program of flood insurance. 

You mentioned in your testimony that flood maps are in the 

process of being remapped and that levees were certified by the 

Army Corps in your town. Could you describe the process of how 

that certification was handled and the division of cost and labor between the local levee sponsors, FEMA, and the Army Corps? 

Mr. KLIETZ. Certainly. Missoula and Missoula County have three 

levees that were built by the Corps—one in 1949 and two more in 

the 1960s within the city of Missoula. When we first heard that the 

NFIP was going to be updating FEMA’s floodplain maps for Missoula and Missoula County, I contacted the Army Corps of Engineers in Seattle, the Seattle District, who built our levees, and they 

readily agreed to come out and assist us with that process. It was 

their dime. They came out, and as they normally inspect our levees 

anyway, they were willing to certify that. They came out, saw the 

condition of our levees, saw that we had been maintaining them, 

8 

but also saw some issues that had concerned them, mainly had to 

do with overgrowth of vegetation. So both the city and the county 

then had to spend several thousands dollars to bring those levees 

into compliance with the requirements for certification. 

That certification, again, was primarily—the cost of doing the 

certification was done by the Army Corps of Engineers out of Seattle. FEMA’s response basically was to review the certification papers that the Corps provided and to ensure that we had an ongoing 

maintenance and operation for those particular levees. So there 

was not a whole lot that FEMA had to do other than review the 

paperwork. And, again, the Corps did most of that work themselves. 

Chairman TESTER. Bottom line, the local levee folks had the financial capacity to handle the cost? 

Mr. KLIETZ. The cost and the obligation of maintaining the levees, not the financial resources if we would have been forced to certify those ourselves like some other Montana communities have. 

Chairman TESTER. OK. As you know—and I was going to ask 

Mr. Bourgeois—coastal levees, does the Corps certify those? 

Mr. BOURGEOIS. Yes, sir. They certify any levees that meet 65.10, 

so they will certify any levees that will have that requirement. 

Some of them are coastal and some of them are riverine in our 

area. 

Chairman TESTER. OK. So in Louisiana, because I am not familiar with it, so this is an education point, what percent does the 

Army Corps certify now? I mean, they used to certify them all in 

Montana. They do not do any of them now. 

Mr. KLIETZ. It is a relatively short number of levee systems. The 

mileage may be up there because they certify the main line Mississippi River levees, but a lot of the additional and ancillary levee 

systems are no longer certified by the Corps, and a lot of the levees 

that we have in our district—for example, we have no federally authorized levees, no Federal levees whatsoever. So none of our levees 

are actually certified currently. 

Chairman TESTER. OK. So this is a question for both of you. 

Since the Army Corps has ceased providing levee certification services for flood mapping, my question is: Without the Corps performing the certifications, how is the process working in your respective States? 

Mr. KLIETZ. Senator, in Montana it is not working at all. The 

town of Miles City has levees. They have not been able to certify 

those levees. The Corps has not certified those levees. The properties behind those levees are being mapped as being within the 

floodplain as if the levee does not exist. 

The city of Livingston did, on their own dime, spend almost 

$300,000 to certify those levees that were built by the Corps. The 

Corps levees in Great Falls, Cascade County, Montana, were able 

to eventually get a 2-year provisional accreditation from FEMA, 

but that is just a 2-year stop gap, and when that 2-year period expires, the levee accreditation will expire. And without the Corps’ 

ability to certify those levees, all those properties will go into the 

floodplain and require those individual property owners to now 

carry flood insurance. 

9 

Chairman TESTER. Could you give me a Louisiana perspective, if 

different? 

Mr. BOURGEOIS. Well, it is somewhat similar. The actual process 

of certifying something is—certifying the levees is very difficult for 

an individual engineering firm to take on the responsibility. So it 

sort of all turns to the Corps, and I think in some cases the Corps 

would be willing, but they have their limitations on what they can 

do, and the funding and everything else also. So it does put everyone in a quandary. 

Chairman TESTER. Well, it is interesting because Montana is a 

headwater State; you guys are where it goes into the ocean; and 

the challenges we have with levee certification obviously are concerning the whole river system. 

Do the local levee sponsors—and this can be a pretty short answer because I think I know what it is. Do the local levee sponsors 

have the ability to certify those levees, even if they could get an 

engineering firm to do it? 

Mr. BOURGEOIS. It would be very difficult and very costly. 

Chairman TESTER. OK. 

Mr. KLIETZ. The same in Missoula. 

Chairman TESTER. All right. I want to talk a little bit about the 

500-year floodplain. Mr. Klietz, you mentioned in your testimony 

the mapping of the 500-year floodplain and a move toward actuarial premiums. I want to flesh this out a little bit. Could you tell 

us a little bit about how these issues affect somebody in your position’s ability to manage the floodplain and ensure the right kind of 

development is happening in the right place? 

Mr. KLIETZ. In regards to the 500-year floodplains, the Montana 

Legislature actually back in the early 1970s went above and beyond the requirements of the FEMA mandates, and they do give 

local communities in Montana the ability to look at 500-year 

floodplains for development purposes. That is quite different than 

what happens at the national level, but we do have that specific 

legislative authority from the State of Montana. 

For instance, in my community, when there is a proposed subdivision within a 500-year floodplain or when there is a proposed 

septic system that needs to be installed for a new home, we ensure 

that those properties are above the 100-year flood elevation and 

that they are constructed so that their lowest floors are 2 feet 

above the 100-year flood elevation, which is the standard for 

freeboard in the State of Montana. 

Chairman TESTER. The last one, and then I will kick it over to 

my Ranking Member. And I may ask this question of the second 

panel, too. You guys touched on a little bit in your testimony about 

the consequences of the continual short-term extension versus a 

flood insurance program that is long term. Could you give me some 

real-life examples in your communities of what you have seen over 

the last few years, the impacts of those short-term extensions, 

problems that have arisen that would not necessarily have to arise 

if we could get a long-term extension passed? Mr. Bourgeois, go 

ahead. 

Mr. BOURGEOIS. Well, as mentioned in my testimony, the whole 

process of reforms that we are working on to give credit or some 

consideration to nonaccredited levees in a Flood Insurance Study 

10 

puts everything in flux. And I would think that even as complicated as the issue is, we could have gotten through this a lot 

quicker, but, you know, with a constant expiration date hanging 

over the whole thing, it is very difficult for everyone to work diligently toward solving such a complicated issue, thinking the whole 

thing could be ending fairly soon. And I know that that has had 

impacts on our development and impacts on—we still have flood 

maps that are in flux. Again, since 2009 and still working on this 

today, we do not have solid maps and things in place that we need 

for floodplain management. 

Chairman TESTER. OK. Mr. Klietz, would you like to respond? 

Mr. KLIETZ. The reduction of property values for property owners 

in the floodplain, their inability to sell their homes when flood insurance has lapsed, and the inability for buyers to want to buy a 

home in the floodplain when they do not know what is going to 

happen, if they are going to be able to pay for their mortgage on 

top of flood insurance and whether flood insurance is going to be 

provided. It has affected property values, and it has affected the 

sales of homes within my community. 

Chairman TESTER. Well, thank you both. I appreciate your testimony, and I appreciate your frank answering of the questions. 

Senator Vitter is here, and I will just turn it over to you because 

I am done with the first panel, David. 

Senator VITTER. Thank you, Mr. Chairman, and thanks to both 

of you for being here, and a special welcome to Dwayne Bourgeois 

of the North Lafourche Conservation, Levee, and Drainage District. 

Thank you for your service and for being here. 

I apologize for being late, but it was only because I was on the 

floor talking about the absolute need to pass a long-term reauthorization now before May 31st, so talking about the same thing. But 

thank for being here. 

Mr. Bourgeois, I just wanted to underscore what I understand to 

be one of your significant points, which is that a lot of important 

improvements and reforms can be done administratively, but all of 

these very short-term extensions really get in the way of that, and 

a long-term full reauthorization would allow that to happen in a 

much more effective way. Is that fair to say? 

Mr. BOURGEOIS. Yes, sir, absolutely. That is the best way to put 

it. And we know it is happening to us here. We are working with 

you guys. FEMA is trying to work with us, I feel, working through 

these issues. The legislators in the House and the Senate put pressure on FEMA to do so. They have agreed. We are all in step. But 

we keep hitting the deadline. 

Senator VITTER. Right. And, again, perhaps the best example 

from our Louisiana experience is this so-called without-levee issue, 

and we want to work through that. 

Mr. BOURGEOIS. Absolutely, and I think we are making headway, 

but we need to be able to do this before June 1st. 

Senator VITTER. Right. Well, of course, the Chairman and I completely agree, and that is why we are pushing hard for that longterm reauthorization. Of course, we do not want to let the program 

expire, but we need to get beyond this Band-aid approach, too. We 

need a real long-term reauthorization for all the reasons you have 

both talked about, so thank you. 

11 

Mr. KLIETZ. Thank you. 

Mr. BOURGEOIS. Thank you. 

Senator VITTER. Thank you, Mr. Chairman. 

Chairman TESTER. Thank you, Senator Vitter. I appreciate your 

support on this issue. You are right. We are trying to get this thing 

done, and I want to thank the panel for their testimony because 

I think it helps contribute to the fact that there are issues out 

there we need to deal with, and continuing to deal with them on 

a short-term basis is not really getting the job done. So I want to 

thank you, and we will bring up the next panel. 

The next panel consists of Dr. David A. Sampson, Mr. Jon A. 

Jensen, Maurice ‘‘Moe’’ Veissi, and Sarah Murdock. You guys can 

all come up, and we will get the proper name tags. 

What we will do, before we start on this panel, is I would like 

to give Ranking Member Vitter the opportunity to say a few words. 

STATEMENT OF SENATOR DAVID VITTER 

Senator VITTER. Thank you again, Mr. Chairman, and I will be 

very brief. I just wanted to underscore really my last point. Today 

is May 9th. The entire program expires after May 31st, 22 days, 

slightly over 3 weeks, and we really, really need to act for the good 

of the country and the economy. And we need to act in a longerterm way, not just another Band-aid, another short-term extension 

which creates and continues an unhealthy level of uncertainty. And 

I appreciate the Chairman feeling the same way and working very 

closely with me and others in this regard. 

I am going to be doing two things this week that I hope get widespread support. I will be passing around a new letter addressed to 

Senators Reid and McConnell urging this to be put on the floor absolutely as soon as possible. Senator Tester and I had that same 

sort of plea in a letter dated February 14th. That was 3 months 

ago. So it is even more urgent now. 

Second, I am going to be proposing as a floor amendment to the 

next bill on the floor after the present one, whatever that is, the 

Senate reauthorization bill with some noncontroversial perfecting 

amendments that have been worked out since Committee. So it 

looks like that next bill on the floor will either be an FDA user fee 

reauthorization or a small business tax bill. Neither of those is 

highly partisan or highly controversial. So whichever of those 

comes up, I will be proposing as a floor amendment the Senate bill 

with the perfecting amendments incorporated into it, and I hope we 

can get bipartisan cooperation and effort to get that attached to 

that bill as a means of pushing this forward. 

Thank you, Mr. Chair, for the couple of minutes, and I look forward to our second panel. 

Chairman TESTER. Absolutely, and I do not think flood insurance 

should be controversial or partisan either. It impacts everybody. 

I want to get started with our next panel, representing broad, 

cross-industry support for reauthorization and reform of NFIP. I 

want to thank you all for being here ahead of time. 

Dr. David A. Sampson is the president and CEO of the Property 

and Casualty Insurers Association of America, otherwise known as 

PCI, which represents more than a thousand homeowners, autos, 

and business insurance companies that write over 30 percent of 

12 

this Nation’s property and casualty insurance. Dr. Sampson also 

served in the George W. Bush administration as Deputy Secretary 

of the U.S. Department of Commerce and Assistant Secretary of 

Commerce for Economic Development. Welcome, Dr. Sampson. 

STATEMENT OF DAVID A. SAMPSON, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, PROPERTY AND CASUALTY INSURERS 

ASSOCIATION OF AMERICA 

Mr. SAMPSON. Thank you, Mr. Chairman and Ranking Member 

Vitter. It is a pleasure to be with you today. I appreciate your leadership on this issue and the invitation to be here. PCI and its 

members, who write about 52 percent of all the flood insurance as 

partners with the NFIP through the Write-Your-Own Coalition 

Program, believe that the NFIP is vitally important to our Nation 

and the economy. It does not just affect one part of the Nation. 

Flooding occurs all across the country. And we fully support your 

efforts to pass bipartisan legislation that includes a long-term reauthorization and meaningful reforms. 

I would like to just briefly emphasize three key points in my testimony today. 

First, it is vitally important to avoid another lapse in the NFIP 

as lapses have real-world negative consequences for consumers and 

the economy. 

Second, as confirmed by the Government Accountability Office, 

the program needs meaningful structural reforms. 

And, third privatization of the Flood Program is not feasible 

under current conditions. 

Let me just expand on those a little bit. 

The first priority, of course, is to avoid a lapse in coverage. You 

have already documented your concern about that. More than 5.6 

million American homeowners, renters, and businesses are NFIP 

policyholders and rely on this program to protect their property. 

You have already discussed the 12 short-term extensions of the 

program since September of 2008 leading to lapses in coverage 

when Congress has failed to act. In 2010 alone, the NFIP lapses 

for a total of 53 days, and during these lapses flood insurance policies could not be issued or renewed. And each time the program 

lapses, a cumbersome and expensive series of special bridging 

transactions is required from insurers and consumers and the 

NFIP to set aside policy purchases, collect funds, and advance 

claim payments. And all of this creates significant friction costs for 

the marketplace and certainly for Americans who rely on this important protection. 

Second, while it is critical for Congress to reauthorize the NFIP 

before May 31st, the program as it stands now needs essential 

structural reforms which are addresses in the Senate Banking 

Committee bill. The NFIP is deeply in debt and must transition to 

a more sustainable path. I would point out that if a private insurance company held no surplus and carried $18 billion in debt on 

a $4 billion annual revenue stream for 6 years running, regulators 

would immediately shut it down and the CEO would be fired, and 

yet that is the situation that we face with the NFIP program. 

13 

Two PCI studies on flood risk pricing revealed that the NFIP is 

providing Government-subsidized flood policies at roughly one-third 

of what the full load risk costs would be in the private sector. 

The subsidies for repetitive loss and high-risk policies are even 

greater. One percent of the properties insured by the NFIP have 

accounted for over a third of the claims on an ongoing basis, and 

the previous panel spoke of that so eloquently. 

The third point I wanted to make is that while the program 

needs to be reauthorized and must be reformed, it is important to 

note that discussions on privatizing the program are unfeasible 

under the current conditions. The current NFIP rates would need 

to be closer to true market rates before any meaningful discussion 

related to the private industry taking on flood risk can take place. 

A 2011 PCI study estimated that if the private market were to 

underwrite the flood peril, policyholders in floodplains could see 

rate increases of up to 200 to 300 to 400 percent. Proposals to end 

the NFIP are unrealistic given the current steep subsidies and the 

unwillingness of many homeowners to purchase coverage in highrisk areas even when mandated at these subsidized risks. 

So we applaud your efforts, and PCI certainly stands willing to 

work with this Committee to do anything we can to help this overwhelmingly bipartisan piece of legislation make it through the Senate in time to avoid the lapse and to pursue the structural reforms 

that you have proposed. 

Thank you, Mr. Chairman. 

Chairman TESTER. Well, thank you, Dr. Sampson. We appreciate 

your testimony, and we will have questions after we get done with 

the testimony of the other panelists. But thank you for your perspective and for your testimony. 

Next we have Mr. Jon A. Jensen, who serves as Government Affairs Committee chairman of the Independent Insurance Agents 

and Brokers of America and as president of Correll Insurance 

Group. He is currently the South Carolina national director for 

Independent Insurance Agents and Brokers of America. He is a 

past chairman of the Independent Insurance Agents and Brokers 

of America’s InsurPac Board of Trustees. I want to welcome you 

today, Mr. Jensen. You may proceed with your testimony. 

STATEMENT OF JON JENSEN, GOVERNMENT AFFAIRS COMMITTEE CHAIRMAN, INDEPENDENT INSURANCE AGENTS 

AND BROKERS OF AMERICA, AND PRESIDENT, CORRELL INSURANCE GROUP 

Mr. JENSEN. Thank you very much. Good morning, Chairman 

Tester and Ranking Member Vitter. I am pleased to be here today 

on behalf of the Independent Insurance Agents and Brokers of 

America—or the Big ‘‘I’’—to present our association’s perspective on 

extension and reform of the NFIP. We commend the Subcommittee 

for looking at this very important issue. I am president of Correll 

Insurance Group, which is an agency with 132 associates in 12 locations, including offices in both Myrtle Beach and Hilton Head Island. We also write nearly 3,000 NFIP policies. Since 2011 I have 

served as chairman of the Government Affairs Committee for the 

Big ‘‘I.’’ 

14 

The Big ‘‘I’’ is the Nation’s oldest and largest trade association 

of independent insurance agents and brokers, and we represent a 

nationwide network of more than a quarter of a million agents, brokers, and employees. Many of these agents serve as the sales force 

of the NFIP, working with Write-Your-Own companies. It is from 

this vantage point that we understand the capabilities and the 

challenges of the insurance market when it comes to insuring 

against flood risks. 

The private insurance industry has been and continues to be 

largely unable to underwrite flood insurance because of the catastrophic nature of these losses. Therefore, the NFIP is virtually the 

only way for people to protect against the loss of their home or 

business due to flood damage. Prior to the introduction of the program in 1968, virtually the only financial remedy available to consumers after floods was Federal disaster assistance. Since then, the 

NFIP has filled the private market void and created a reliable safety net for people whose properties have suffered damage. 

With this said, we do recognize that the program is far from perfect, which was made all the more clear by the devastating 2005 

hurricane season. The current $17.2 billion dollar debt reveals 

some of the deficiencies of the program, and it is clear that Congress should shore up the NFIP’s financial situation. 

For this reason, the Big ‘‘I’’ is very encouraged by Chairman 

Johnson’s legislation, the Flood Insurance Reform and Modernization Act of 2011. I want to be very clear: The Big ‘‘I’’ strongly supports a long-term extension and reform legislation. There are important reforms that must happen to the program in order for it 

to be put on stable footing. 

In particular, the Big ‘‘I’’ for many years has asked Congress to 

begin phasing out subsidies found in the program. We are pleased 

that Chairman Johnson’s legislation contains proposals to do just 

that for many properties. 

Additionally, the Big ‘‘I’’ welcomes the legislation’s proposal to increase the amount FEMA can raise premiums in any given year. 

Currently, FEMA can only raise premiums by 10 percent on any 

property. The legislation would propose to increase this to 15 percent, which would allow the program to become more financially 

sound. 

I would also like to comment on some recent discussions aimed 

at finding ways to privatize the program. The Big ‘‘I’’ would always 

prefer to utilize the private market. However, we have yet to see 

evidence that the private marketplace is any more prepared or capable of underwriting flood risk today than they were in 1968. That 

said, we welcome the study on privatization options found in the 

legislation, and we would be happy to discuss any ideas for increasing the private market’s role going forward. 

Finally, I would like to touch on one of the most important things 

found in the reform legislation, and that is the long-term extension. 

As you know, for the past 6 years, Congress has not passed a longterm extension of the program and instead has opted to pass numerous short-term extensions. This has been done mainly so that 

Congress could continue efforts at reform legislation. While the Big 

‘‘I’’ fully appreciates the passage of each of these short-term extensions, it should be noted that there is increasing frustration both 

15 

in the marketplace and among our consumers with the program 

and its complete lack of stability. 

A 5-year extension of the NFIP, as found in S. 1940, is of more 

importance than I can stress. We strongly urge the Senate leadership to secure floor time for a full debate of S. 1940. In fact, as you 

know, this week a number of organizations from various industries 

are taking part in a Flood the Hill Week to urge the Senate to finally pass S. 1940. I am happy that three panelists here today— 

the realtors, PCI, and Nature Conservancy—are part of that effort. 

Hopefully we can make some progress this week. 

I thank the Committee for giving me the opportunity to express 

the views of the Big ‘‘I’’ on this important issue, and I look forward 

to any questions you may have. And on a separate note, I would 

like to thank you, Mr. Chairman, on behalf of our entire membership for introducing NARAB II. We look forward to working with 

you on this commonsense agent licensing reform legislation. 

Chairman TESTER. Well, thank you, Jon. I appreciate the kudos, 

and it is good to see a guy who spells ‘‘Jon’’ right. So thank you. 

[Laughter.] 

Chairman TESTER. I appreciate your testimony. 

Mr. Maurice ‘‘Moe’’ Veissi is president of the National Association of Realtors representing 1.1 million members involved in all 

aspects of residential and commercial real estate industries. He 

was elected president of the Florida Association of Realtors in 2001 

and was named Realtor of the Year in 2003. 

I want to welcome you here today, Mr. Veissi, and proceed with 

your testimony, please. 

STATEMENT OF MOE VEISSI, 2012 PRESIDENT, NATIONAL 

ASSOCIATION OF REALTORS 

Mr. VEISSI. Thank you, Chairman Tester, Senator Vitter, and 

Members of the Subcommittee. Thank you for the opportunity to 

testify on this urgent need for a 5-year reauthorization of the National Flood Insurance Program. And I would be remiss if I did not 

bring you these salutations from Marbury Little, past president of 

the Louisiana Association of Realtors, and all the 5,000-plus Realtors in Louisiana who appreciate, Senator Vitter, your involvement 

and commitment to this issue; and from Betty Kissock and Ronda 

Tompers, who said specifically, Chairman, to tell you that they are 

very much pleased and very much committed to what you are trying to accomplish here on the Hill. 

Chairman TESTER. Thank you. 

Mr. VEISSI. My name is Moe Veissi. I am the 2012 President for 

the National Association of Realtors and the broker-owner of Veissi 

& Associates in Miami, Florida, a Realtor firm that has been in existence for over 42 years. 

The National Association of Realtors represents more than a million members, as you have mentioned, involved in all aspects of the 

real estate industry. Long-term reauthorization and reform of the 

National Flood Insurance Program is a key priority to our members. As a matter of fact, on May 17th, here in Washington, DC, 

we will have over 15,000 Realtors at the Washington Monument, 

and one of the five key issues that we will be speaking to the folks 

on the Hill about is just this issue. 

16 

Ensuring access to affordable flood insurance is critical. It creates certainty in the real estate market, and certainty is required 

for this real estate market to recover. Home prices are still enormously fragile across the United States, and more than a quarter 

of a million of existing home sales are distressed properties. Tight 

lending standards remain a problem, and we do not want to give 

a lender another excuse not to approve a loan. 

Stopgaps or shutdowns exacerbate this market uncertainty. 

There have been 17 stopgaps since 2008. Twice, failure to act led 

to program shutdowns, and the latest is set to expire, of course, as 

you know, on May 31st of this year. 

The National Flood Insurance Program stopgaps and shutdowns 

have broader implications for the U.S. economy. NFIP is essential 

to 500,000 home sales annually; 1,300 sales nationally can be delayed per day if we do not have this program—intact. More than 

47,000 real estate transactions were stalled in June 2010 for the 

33 days that this act was not in service. 

Over 16,000 homes are in the floodplains in Montana. Over 

660,000 homes are in the floodplains in Louisiana. But more than 

the homes are impacted by this. The commercial, multifamily, and 

refinancing of properties all are impacted by the uncertainty in the 

National Flood Insurance Program. 

The 5-year National Flood Insurance reauthorization offers broad 

advantages, and the first one is the important bipartisan win for 

Congress, which in my humble estimation is so much needed right 

now. 

Two, this has passed unanimously out of Committee, and the 

House has passed this bill by over 400 votes. Crucial reforms are 

lost if the 5-year bill is not adopted: enhancing FEMA communications with communities, greater notification of floodplain mapping, 

reimbursement of flood map and appeal expenses for NFIP errors, 

streamlining of the mapping appeals process, additional time for 

the resolution of appeals, and review of flood mapping standards 

and procedures. The number of States that are affected are enormous. This is no longer a coastal issue. Places like West Virginia, 

Tennessee, Kentucky, Alabama, New Mexico, Vermont, Kansas, 

Iowa, Nebraska, Missouri, Utah, Minnesota, Wyoming, North and 

South Dakota all have related Presidential disaster declarations, 

and there is more. Every time we slow this down, every time we 

create an uncertainty in this program, we slow down the process 

of a healthy real estate recovery in this country. 

If there is one thing that is enormously important to this country’s economic and social and cultural background, it is the resurgence of a strong and healthy housing market and peripheral industry. 

So I would encourage you to continue to do the good work. You 

have the National Association of Realtors who believes and understands your commitment. Thank you very much. 

Chairman TESTER. Moe, thank you for your testimony, and I 

could not agree more. The real estate recovery is critically important to get our entire economy back on track. Thank you for your 

testimony. 

Next we have Sarah Murdock, senior policy advisor for climate 

change policy with The Nature Conservancy, a leading conservaVerDate Nov 24 2008 11:15 Apr 25, 2013 Jkt 048080 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 L:\HEARINGS 2012\05-09 AM ZDISTILLER\50912AM.TXT JASON
17 

tion organization working to protect ecologically important lands 

and waters. Ms. Murdock handles climate change adaptation strategies and Federal hazard risk reduction policy for The Nature Conservancy. She has also worked here in the Senate, working for Senator John Kerry. 

Welcome, Ms. Murdock, and you may proceed with your testimony. 

STATEMENT OF SARAH MURDOCK, SENIOR POLICY ADVISOR, 

THE NATURE CONSERVANCY 

Ms. MURDOCK. Thank you, Mr. Chairman and Members of the 

Subcommittee. Thank you for the opportunity to present The Nature Conservancy’s views on the timing and nature of reforms to 

the National Flood Insurance Program. My name is Sarah 

Murdock, and I am a senior policy advisor for the Conservancy. 

The Nature Conservancy is an international, nonprofit conservation organization working around the world to protect ecologically 

important lands and waters for nature and people. 

The Nature Conservancy continues to support a 5-year reauthorization of the National Flood Insurance Program through the passage of the Senate Banking Committee’s flood insurance reform 

legislation. We ask that this legislation be brought before the full 

Senate for debate and consideration at the earliest opportunity. 

The Nature Conservancy is also a member of the Smarter Safer 

Coalition, a diverse coalition of environmental organizations, taxpayer advocates, insurance industry representatives, and housing 

groups. Smarter Safer also strongly supports the Senate Banking 

Committee’s flood insurance reform, and this week we are participating in this week’s Flood the Hill activities. With this much diverse political support, it seems like passage of flood reform represents a win for all. 

Contrary to congressional intent, the program as it currently 

functions is increasing risk from storms and flooded to people, 

property, and ecosystems, and the important services that those 

ecosystems provide to people. Enactment of the flood insurance reform legislation will phaseout subsidies that have undermined the 

financial stability of the program, will require FEMA to ensure 

that maps are updated and accurate so that people can understand 

and better prepare for their risks, and will streamline and 

strengthen the mitigation programs to help decrease flood risks 

and better protect flood-exposed communities, homes, and businesses. 

I would like to focus the remainder of my testimony on our interest in this final provision—our support for strengthening the mitigation programs. 

In 2011 alone, there were 58 Federal flood disaster declarations 

covering 33 different States and costing $8 billion and causing 113 

deaths. Both the costs and the number of deaths exceeded the 30- 

year averages, and results from scientific studies indicate that 

changing climate has exacerbated and will continue to intensify extreme weather events, including flooding and coastal storms. 

The proposed reform legislation is the most important single step 

we can take toward mitigating these risks. Currently, under the 

Flood Insurance Program, a dangerous feedback loop is in play. 

18 

Subsidized insurance rates facilitate development in coastal zones 

and freshwater floodplains, which not only puts people and property at risk, it simultaneously facilitates the destruction and degradation of the ecosystems that provide a natural defense to people 

and properties. 

The traditional approach to flood protection and river floodplain 

systems has been to rely on dams and levees to contain flood waters and in coastal areas has been to build sea walls, bulkheads, 

and other ‘‘grey’’ infrastructure. While built infrastructure plays an 

important role in helping secure our communities, it requires substantial investments for both initial construction and ongoing 

maintenance. 

Instead of relying solely on grey infrastructure, an alternative 

approach involves integrating the use of natural infrastructure—or 

so-called ‘‘green’’ infrastructure—with built infrastructure. This 

specifically involves maintaining and restoring the connectivity of 

rivers along with sufficient area of floodplain and conserving and 

restoring coastal natural infrastructure such as wetlands, reefs, 

dunes, barrier beaches, and islands. 

In addition to flood control benefits provided, these ecosystems 

provide many services that support and protect humans and nature, such as filtering pollutants, erosion protection, production of 

fish and shellfish, and continued agriculture production. 

The Nature Conservancy is working with diverse partners across 

the country to implement floodplain restoration projects and along 

the east and Gulf coasts, in Louisiana and Alabama in particular, 

we are restoring and building oyster reefs as a way of protecting 

against floods. 

Due to our understanding of the benefits of investments in mitigating efforts, we stand ready to work with FEMA and Members 

of Congress to strengthen this aspect of the Flood Insurance Program. 

Thank you for the opportunity to present The Nature Conservancy’s recommendations on the need to pass the Senate’s 5-year 

reauthorization of the Flood Insurance Program. 

Chairman TESTER. Well, thank you, Ms. Murdock. I appreciate 

your testimony, as I do with the whole panel. We will start with 

questions now. I want to, before I start, though, thank each one of 

you for your commitment to a long-term reauthorization. I very 

much appreciate it. 

I think the clerk can put on 7 minutes. We will probably have 

more than one round, would be my guess. 

I am going to start with the most pressing issue that is facing 

us right now, and that is the danger of a lapse in the program. I 

understand—and this may be different today. I do not know, Senator Vitter, but the short-term extension has cleared my side of the 

aisle. I do not know if it has cleared yours yet or not. But we are 

working together to try to get this done. In some cases, I would 

rather just see us get this thing done rather than deal with the extension. I think that is what Senator Vitter talked about in his remarks. 

I want to drill down on the point of the lapse because the clock 

is ticking. In your testimony, you all spoke of consequences which 

can be pretty severe if this program does lapse again. So what I 

19 

would like is from each one of your different perspectives, describe 

the most damaging consequences of failing to extend this program. 

And at what point prior to the expiration do carriers and agents 

and realtors and homeowners need to start preparing for a potential lapse? Go ahead, Dr. Sampson. 

Mr. SAMPSON. Well, while the costs of the lapse are hard to 

quantify, they are very real. And in answer to your question, Mr. 

Chairman, insurers are already in the process, now that we are 

this close to the expiration, of beginning to mail out those notices 

of the imminent lapse of the program. Now, the only one who wins 

by that may be the U.S. Postal Service because they get revenue, 

and I know you have been dealing with that recently, but those are 

embedded friction costs to insurers. And I think it is these repetitive lapses in the program that have caused a number of major 

participants in the Write-Your-Own Program to leave in recent 

years. We are down to 85 active participants in the program from 

150 just a few years ago. 

So that is giving you the indication that the frustration and the 

friction costs of these very complicated bridging transactions are 

making it not worth the participation from the insurers’ perspective. 

Chairman TESTER. OK. Jon, would you like to respond to that? 

Mr. JENSEN. Yes, sir. As Dr. Sampson mentioned, the carriers 

are forced to start sending out these notices. The perspective from 

an agency, as I mentioned in my testimony, we have 3,000 flood 

insurance policies. That means we will get 6,000 calls from folks 

that say, you know, ‘‘What is happening? What is going on?’’ 

I would also emphasize that it is truly important to the consumers. As a matter of fact, this morning on a cab ride over I was 

forced to share a cab with five other people due to some transportation issues, but one of the ladies had a home in Charleston, 

Structural, and asked me what I was doing here. And I explained 

to her, and she said, ‘‘My God, don’t they understand that hurricane season is June 1st?’’ And this lapses May 31st. She said, ‘‘We 

get these notices all the time.’’ And as we were leaving the cab, she 

said, ‘‘Would you do me a favor?’’ She said, ‘‘My name is Angie 

Davis. Would you please tell the Senate to do good work here. We 

need flood insurance. We cannot be without it.’’ 

Chairman TESTER. That is good. Thanks, Jon. 

Maurice? Moe? 

Mr. VEISSI. You know, six of the last eight recessions have come 

out because of a healthy housing and construction market. We 

know that every two houses sold generate one job, so even in the 

worst of times, we are generating about 2-plus million jobs a year 

when a housing market is on track. Without national flood insurance, we affect so many homes—not just coastal States but interior 

States today. And even those that have existing homes—not potential homeowners, not folks that are looking to either go out and sell 

their home or buy a new one, but those that exist—have clauses 

in their existing mortgage that simply say if there is a failure to 

renew flood insurance, the mortgage could be in technical default. 

So even those folks do not know how at risk they might be. 

This is a fledgling, recovering real estate market. As important 

to this market as any other aspect, as important to the recesVerDate Nov 24 2008 11:15 Apr 25, 2013 Jkt 048080 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 L:\HEARINGS 2012\05-09 AM ZDISTILLER\50912AM.TXT JASON
20 

sionary period that we have had is a healthy real estate market 

both from the economic standpoint for America and from the social 

and cultural standpoint. And when you do anything—anything—to 

affect that fledgling real estate recovery, you are literally affecting 

the economic recovery and the social and cultural aspects of America. I cannot tell you how important this piece of legislation is and, 

Senator Vitter and Senator Tester, how important your efforts are 

to get it extended for the 5 years. That is enormously important 

not just to Realtors but to American homeowners. 

Chairman TESTER. Just a real quick follow-up, Moe. You may not 

know this on a national basis, but you may know it on a southern 

Florida basis. If this thing were to expire, what kind of impact as 

far as percentage of homes would it have, say, in southern Florida? 

Mr. VEISSI. Well, I cannot be specific about that, although I will 

get you those—— 

Chairman TESTER. Is it a big number? I just want to get an idea. 

Mr. VEISSI. As I quoted to you, nationally the lapse stalled about 

1,300 a day, or 47,000 during June 2010. But in Florida, where we 

would be specifically impacted because the entire State, for all intents and purposes, is a floodplain, it would impact every one of 

those sales and even the existing mortgages. Percentage-wise, I am 

going to guess at least one out of every two. 

Chairman TESTER. Thank you very much. 

Ms. Murdock, from your perspective, from The Nature Conservancy’s perspective, if we just keep doing extensions or if it is to 

expire, how does that impact the mitigation efforts? 

Ms. MURDOCK. Clearly, we are seeing more frequent and more 

intense storms, which is causing more and more damage. And the 

mitigation efforts are long-term efforts. They are not something 

that can happen overnight. So you need that long-term certainty of 

the program, the backing of the program and the grants that they 

provide in order to really plan for an implement some of these mitigation efforts. 

Chairman TESTER. Thank you. 

Senator Vitter. 

Senator VITTER. Thank you, Mr. Chairman. And I certainly 

strongly support a short-term extension if we need it, if we cannot 

do anything else before May 31st. In fact, I think technically it is 

my bill, so I will certainly be trying to clear that if it is necessary. 

I am just concerned about two things. Number one, patience is 

running really thin among some members about doing all these 

short-term extensions, so we may not be able to clear it. ‘‘Clear it’’ 

means get unanimous consent, every Senator on our side has to 

agree. And, you know, the more these Band-aid extensions we do, 

the less patience members have because they want reform, which 

is needed. 

Second, a short-term extension avoids a lot of negatives, but it 

does not accomplish the positives that the full reauthorization does, 

and I think that was one of Moe’s points. So I am for it if we can 

only do that between now and May 31st, but I am also trying, as 

Jon and others are, for the full reauthorization. 

May 31st is 3 weeks and a day away. When do concrete negative 

actions, notices, letters, other things, start going out compared to 

that date? Is it now, Dr. Sampson? 

21 

Mr. SAMPSON. They have already started. 

Senator VITTER. Why don’t you describe some of that and when 

that starts? 

Mr. SAMPSON. Sixty days out from the expiration of the program, 

insurers are required to notify holders of policies that the coverage 

is going to be ending. And then as I say, it has a cascading—during 

the lapse, there is this whole cascading series of very complicated 

bridging transactions that add no value to the process but only cost 

to the carriers and uncertainty to the policyholders. 

You know, we are in a bizarre situation where you have the National Flood Insurance Program actively advertising the NFIP on 

television to try to increase the take-up rate, which is the socially 

responsible thing to do. And yet everyone who has a policy knows 

the number of disruptions that we have experienced over the last 

several years. And so, you know, we are really sending cross signals here, and these lapses are causing companies to exit the program, and I am convinced that these continual lapses create such 

uncertainty in the policyholder that it reduces and suppresses the 

take-up rate and the renewal rate. 

Senator VITTER. And I assume part of what you are saying is a 

near lapse, a near miss, is also negative. I mean, if you act the day 

before or 3 days before, that is also not a great situation. 

Mr. SAMPSON. Well, we are within the period where negative activities are already occurring from the companies’ perspective. 

Senator VITTER. Right. 

Mr. SAMPSON. But I would say, if you can get the short-term extension without letting it lapse, we are talking about here the least 

of the bad alternative. So certainly we are in the cone of negative 

activity, but it is not as negative as it will be if we get to May 31st 

and the program lapses for the 13th time. 

Senator VITTER. Right, right. OK. 

That is all I have. Thank you, Mr. Chairman. 

Chairman TESTER. Senator Moran. 

Senator MORAN. Mr. Chairman, thank you. I am not a Member 

of this Subcommittee, although I am a Member of the full Committee, and I appreciate you allowing me the opportunity to join 

you today, really only for the purpose to lend my support to the efforts of the two of you to see that we get this accomplished and to 

hear from the witnesses today so that I can have my arguments 

reinforced. 

I still remain baffled by—at least I am unaware of a response to 

the letter that the two of you led to our leaders asking that the 5- 

year reauthorization be considered by the Senate. I just do not understand why this is something that cannot be accomplished based 

upon the nature of this legislation, its importance, its value to the 

country, and its bipartisan support. And so every once in a while, 

when we have to admit how dysfunctional this place is, this just 

seems to me to be the perfect example of dysfunction. And if there 

is something I can do, Senator Vitter, Senator Tester, to assist in 

your efforts to get the 5-year reauthorization bill to the Senate 

floor, I am your ally. And I appreciate the testimony that I read 

and heard expressing the value and importance of accomplishing 

that. 

22 

What Mr. Sampson just said I had not thought about, but it does 

make sense to me that the ability to continue to write these policies in this uncertain environment diminishes as Congress fails to 

act on so many occasions. 

I appreciate you having this hearing to highlight the importance 

of this legislation, and I am pleased that you would allow me to 

join you for this brief period of time. 

Chairman TESTER. I have got another question here. There are 

some that have suggested that a 2-year straight extension would 

be better than the reform of the existing insurance program. I 

think both Senator Vitter and Senator Moran alluded to it. I think 

we have an opportunity here to reform this program and put it on 

more firm ground with a long-term extension. 

I would just like—and this is basically to Dr. Sampson or Mr. 

Jensen or Moe, either one of the three or two of the three or all 

of you can talk to this. But beyond improving the solvency of the 

program, could you discuss some areas where reform on this bill is 

important to the constituencies that you represent? What else does 

it provide? 

Mr. JENSEN. Thank you, Senator. In addition to the reform, as 

you mentioned, there are some issues with increasing maximum 

coverage limits. Currently, the coverage limit on a home for flood 

loss is $250,000 as the maximum indemnity limit. That is increasingly becoming a problem and an issue as we see higher values in 

homes again. 

As well, we are looking at business interruption. It is important 

to note that there is a study called for in the bill that talks about 

business interruption coverage within the commercial sector. We 

think that is very valuable as well. 

Mr. VEISSI. In addition, you heard testimony on the previous 

panel of folks that were placed in areas that, in fact, were not in 

a floodplain. One of the bill’s reforms would be to enable folks who 

were not in floodplain areas but were charged for flood insurance 

to come back and get reimbursed for their floodplain appeal expenses. So that would help us for the folks that have been incorrectly mapped into the floodplain. 

Chairman TESTER. Thank you. 

Mr. SAMPSON. Mr. Chairman, I would say that from the company 

perspective, the number one concern is the fiscal reforms, and I 

would not underestimate that at all. I think the bill also, though, 

does address the repetitive loss properties. I think it is absolutely 

essential, as the previous panelists talked about, that repetitive 

loss properties where you have 1 percent of the properties that account for 30 percent of all of the claims in the NFIP, the reform 

bill does address that. And I would say that that is a critical component. 

The increase in the amount that FEMA can increase premiums 

to incrementally move toward an actuarially sound rate, while important, I would say what is even more important than that, 

though, is that FEMA has been unwilling to raise the premium 

prices even by the amount that they are currently authorized in 

legislation, which is 10 percent a year. And so even more important 

than raising the cap in legislation of what they could raise prices 

I think is a signal to the marketplace that they will actually do 

23 

that in incremental steps. The longer you artificially suppress these 

rates, the greater the impact is going to be on the consumer down 

the road. 

So in addition to what is in the legislation, this Committee and 

other committees of jurisdiction, encouragement of FEMA to use 

the authority that they currently have I think is critically important. 

Chairman TESTER. Well, thank you. 

Ms. Murdock, in your testimony you cite an interesting statistic that for every dollar spent on flood mitigation, $5 are saved. In 

your testimony you make the distinction between grey and green 

flood-related infrastructure investments. Could you just elaborate 

on the distinction between grey and green infrastructure investment and the relative costs of both? 

Ms. MURDOCK. Yes. When we are talking about grey, we are 

talking about hard infrastructure like levees and dams, bulkheads, 

sea walls. An increased focus is now being placed on implementing 

projects where we allow natural systems—floodplains, wetlands, 

coastal wetlands, barrier beaches, oyster reefs—to also perform 

flood mitigation services. So we are doing a lot of projects like that 

both in floodplain systems focused on restoring floodplains. Some 

of that involves just setting back levees far enough from the river 

to allow floodplains to perform their natural function. And then 

along the Gulf coast, for example, where we have a goal of building 

100 miles of oyster reefs along the Alabama coast. 

The cost comparison compared to grey infrastructure is very new, 

and we are actually starting to work in partnership with some insurance companies to accurately compare the cost of grey versus 

green infrastructure. We have some preliminary figures on the oyster reefs, but it is very new, and I do not think it accurately yet 

reflects what the true cost/benefit of the green versus grey would 

be. 

Chairman TESTER. Thank you very much. 

Senator Wicker is coming here in just a second, and I want to 

make sure to get his perspective for his questions. In lieu of that, 

I just want to say this, first of all—and he will be here momentarily. I would just like to say thank you for your testimony—we 

are waiting for you, Roger. You are good to go. Go ahead and get 

organized while I talk for a second. 

I want to thank you for your testimony. I can tell you that Senator Vitter and myself and Senator Moran and others want to 

make sure we get this thing considered and moved forward. I 

think, as you do, Moe, that this is a critically important piece of 

our economic recovery, and I think the longer we put this off, I 

think it is just a missed opportunity. So the coalition that has 

formed here and the work that you are doing on the Hill, do not 

underestimate it. It is critically important to put pressure on everybody that serves in the Senate to allow us to put pressure on leadership to take this bill up sooner rather than later. 

And with that, Senator Wicker, you have comments, questions. 

Have at it. 

Senator WICKER. Right, and thank you, Mr. Chairman. I have 

been back in my office watching the hearing while trying to get my 

desk cleared. I would not be surprised if some other Members of 

24 

the Committee also were availing themselves of this opportunity. 

But I just had to rush down and add my support for what you are 

trying to do, Mr. Chairman, and to thank all of these Members of 

the panel for their excellent remarks. 

I guess it was the representative from the realtors—I am not 

sure, but someone made a very cogent point. You know, Mr. Chairman, we need a bipartisan accomplishment in this Senate. And we 

have it in our grasp to do this on a very important issue. The 

American people are looking at us, they are looking to us. They expect us to come to Washington and actually engage in accomplishments, and this is an opportunity for us to do that. A good vote in 

the House, strong support in this Committee, and the opportunity 

is right there. 

So for those Members of the leadership within the sound of our 

voices, I just had to rush down before we gavel to a close and say 

that I absolutely hope we can do this. 

I would mention that the Committee leadership has been very 

generous in working with me and others on the so-called Coastal 

Act, which is a small step toward using science that is already out 

there to get us toward a resolution on this wind and water issue 

that is often a problem when a hurricane comes along. But you 

have made great points. This is not just a bill for people along the 

oceans and the gulf. This is a bill for the entire United States of 

America. It is a bill for the taxpayers, for heaven’s sake. And so, 

Senator Tester, thank you for your leadership and that of Senator 

Vitter, and I appreciate Senator Moran coming, too. 

I do not have questions because the questions I would have 

asked had been asked while I was listening. But thank you very 

much, and let us keep this up and let us redouble our resolve to 

actually get an accomplishment for the taxpayers and for the 

American public. 

Chairman TESTER. Well, thank you, Senator Wicker. We certainly appreciate your long support and working on this bill has 

been critically important, and I think you are right—Moe brought 

it up—it is a good bipartisan win. It is something that we need to 

do that will help do a lot of good things for a lot of folks out there, 

and plus fix some fiscal problems that this program has. 

So I just want to thank this panel, and I want to thank the previous panel for their testimony. The hearing record will remain 

open for 7 days for any additional comments that anybody might 

want to add for that, or any questions that folks want to submit 

for the record. 

With that, thank you all very much, and this hearing is adjourned. 

[Whereupon, at 11:21 a.m., the hearing was adjourned.] 

[Prepared statements and additional material supplied for the 

record follow:] 

25 

PREPARED STATEMENT OF TODD KLIETZ 

MISSOULA COUNTY FLOODPLAIN ADMINISTRATOR, MISSOULA, MONTANA

MAY 9, 2012 

On behalf of Missoula County, Montana, and the Association of Montana Floodplain Managers, I am honored to appear before you today to provide comment on 

the reauthorization of the National Flood Insurance Program. 

I respectfully urge this Committee to ensure that long-term reauthorization of the 

National Flood Insurance Program (NFIP) is enacted prior to May 31st. Over the 

past several years, I have witnessed the results that delayed and uncertain congressional action on reauthorization has caused within my community and my State. 

Property values, already having fallen due to the economy, fall further in the floodplain due to buyer’s uncertainty that Congress will provide homeowners with longterm flood insurance coverage. Real estate transactions have been delayed—and 

some have completely fallen through. Homeowners—many of whom already must 

sell their property at a loss—are forced to reduce their sales prices further. The 

small pool of local insurers that are willing to process flood insurance policies dwindles further as they become increasingly frustrated with the ever-changing uncertainty the last several years of delayed short-term reauthorizations has caused. 

Floodplain citizens need to know that you have their back by reauthorizing the National Flood Insurance Program for the long term. 

This is not to say that we support reauthorization of the exact same flood insurance program that has contributed significantly to our national debt. From my perspective, reform is correctly focused on the insurance side as the requirements for 

floodplain development within NFIP communities do work—simply tour a participating community post-flood to see those results. My own community just experienced a 10-year flood last Spring. Older homes built before FEMA mapping were 

destroyed while the newer homes right next door suffered virtually no damages. 

The commonsense reforms including those that the Montana delegation and this 

Committee have put forward must be included in long term reauthorization. The 

American taxpayer is increasingly unwilling to provide financial support for those 

who have time and time again received handouts post-flood who then do absolutely 

nothing to prevent future damages as they know Uncle Sam will be there check in 

hand to quite literally bail them out again. Many repetitive loss property owners 

within my community received FEMA checks last year. None have voluntarily chosen to mitigate their homes. 

Gone too are the days that the taxpayer will support those who knowingly choose 

to live in areas and in homes with severe flood risk—so we thank you for moving 

the National Flood Insurance Program away from overwhelmingly tax-subsidized 

premiums towards actuarially rated policies. I also want to thank you for your commitment to fund ongoing mapping so that communities in rural States like Montana 

will eventually be provided with detailed floodplain maps allowing our citizens to 

build homes constructed through means that minimize flood loss. 

I further appreciate the efforts that are being made regarding levees. Although 

the issuance of new FEMA floodplain maps for my community has been on hold for 

several years due to inconsistencies with how FEMA is mapping properties behind 

levee-like structures such as railroad beds, roads and even interstate highways, my 

community was fortunate that the Army Corps of Engineers certified their levees. 

This makes sense as the Corps designed, built and inspects them on a regular basis. 

My community’s experience with the Seattle District of the Army Corps of Engineers was exactly the way it should be. We asked, they came and while we had 

some unexpected work that needed to be done, we did our job in maintaining 

them—and the Corps did their job in certifying them. Unfortunately, other Montana 

communities have been required to spend hundreds of thousands of dollars to certify 

levees that the Corps designed, built, and already inspects. An unjustifiable burden 

on those communities and their residents, we are glad to see the Senate taking a 

proactive position to put the Federal responsibility for certifying Federal levees back 

where it belongs. 

The positive reforms that have been put forward are long overdue and I applaud 

your efforts to make them happen. However, there remains one very important 

issue: 500-year floodplains. You’ve heard testimony regarding the losses that the 

National Flood Insurance Program incurs—i.e., the taxpayers incur—when homes 

within ‘‘500-year floodplains’’ are damaged. The Senate Bill will ensure property 

owners will now be notified of the risk of living in a 500-year floodplain. The problem is that FEMA does not map 500-year floodplains. These areas are identified as 

‘‘Shaded-X’’ on the floodplain maps and in small print, the corresponding legend 

states these are actually ‘‘areas of 100-year flood’’ OR ‘‘areas protected by levees 

26 

from 100-year flood’’ OR ‘‘areas of 500-year flood.’’ Until FEMA is actually required 

by Congress to map these Shaded-X areas based on actual topography, the maps 

simply cannot be relied on to determine if a building proposed in these locations is 

actually within the 500-year floodplain or will be inundated during lesser flood 

events. Last Spring, I was in a Shaded-X ‘‘500-year’’ home with a full walkout basement that was inundated during our 10-year flood. There are no Federal requirements for how that home should have been built—nor how that home should be 

mitigated to prevent future losses. There are no requirements that the property 

owner obtain flood insurance to ease the burden on the taxpayer. The property owners had received FEMA checks multiple times prior to last year’s 10-year flood 

event—and they did so again last Spring. 

I was in another flooded home that was built in the 100-year floodplain—with a 

basement. It should have never happened but it did. Although that home was not 

constructed in compliance with FEMA requirements, those property owners also received a check from FEMA. 

I sincerely appreciate the opportunity to appear before you today and would like 

to leave you with my own Top Three reform requests: 

• Stop issuing subsidized flood insurance policies for new structures built after 

FEMA’s floodplain designation. As addressed in the Senate Bill, the taxpayer 

will no longer be forced to subsidize insurance for those that choose to build in 

designated floodplains. 

• Stop rewarding those who bring fill into the floodplain to protect their development at the expense of pushing those floodwaters onto their neighbors. FEMA 

encourages this practice by issuing Letters of Map Revision Based on Fill 

(LOMR–F) which completely removes the owner’s obligation to obtain mandatory flood insurance coverage and contribute to the National Flood Insurance 

Program. 

• Stop issuing FEMA floodplain maps without providing written notice to affected 

property owners. FEMA has the audacity—and the budget—to send notices to 

widows on fixed incomes in Bozeman and Missoula whose homes are nowhere 

near the floodplain which scares them into buying flood insurance—but FEMA 

does not have the budget or desire to send such notices to people that are actually in the floodplain?! Thankfully, notification is now addressed in the Senate 

Bill—scare tactics are not. Even Missoula City Hall located nearly a half mile 

from the floodplain received such a letter from FEMA. Targeting extremely low 

risk properties may be good for the bottom line but is not what citizens expect 

from their Government. 

In closing, I sincerely thank this Committee and both Houses for pursuing significant reform—and providing our citizens with long-term, confidence restoring, reauthorization. 

PREPARED STATEMENT OF DWAYNE BOURGEOIS 

EXECUTIVE DIRECTOR, NORTH LAFOURCHE CONSERVATION, LEVEE, AND DRAINAGE

DISTRICT, RACELAND, LOUISIANA

MAY 9, 2012 

I would like to thank you Mr. Chairman and Members of the Committee, for this 

opportunity to testify today. I am the Executive Director of the North Lafourche 

Levee District, a political subdivision of the State of Louisiana. However, I am here 

today representing a broader coalition of agencies, citizens, and businesses in the 

State of Louisiana who rely heavily on the National Flood Insurance Program. 

We commend the Committee for addressing long-term reauthorization and reform 

of the National Flood Insurance Program. Further, we appreciate the opportunity 

to provide to you today details of our current circumstances which are typical for 

many areas in South Louisiana and across our Nation. We firmly believe that our 

issues are being complicated and made worse by the lack of a long-term reauthorization of the National Flood Insurance Program. We also believe that our issues clearly demonstrate a need for reform, a reform that we are right in the middle of at 

this time. 

Our issues began in mid-2009 with FEMA’s issuance of Preliminary Digital Flood 

Insurance Rate Maps (DFIRMS) for our area. It was immediately obvious to us that 

the maps could not possibly represent the true risk of flooding in our area because 

the maps had no correlation to any real world features. The North Lafourche Levee 

District, along with the South Lafourche Levee District and the Lafourche Parish 

Government immediately began to prepare our appeals to FEMA. (A full copy of the 

27 

Appeal launched by the North and South Lafourche Levee Districts is included as 

Attachment A.) 

The conclusion in our appeal was that FEMA’s policy of removing noncertified levees before running the wave analysis part of their Flood Insurance Study was a scientifically unsound policy. This approach to mapping produces DFIRMS that indicate base flood elevation zones with boundaries that have no correlation to real 

world features. Such maps are not understood or acceptable to local residents and 

businesses. Further, and most importantly, we noted that intentionally ignoring the 

impact of noncertified levees on the propagation of floodwater necessarily yields results that overstate the risk of flooding in some areas and understates the risk of 

flooding in other area. We also noted that FEMA’s Mapping Partners had insufficient information, familiarity and experience to realize the results of their mapping 

efforts were not a reasonable result of their study. Finally, we pointed out that the 

modeling and mapping results were not in even basic agreement with past flooding 

patterns and historical data. 

Particularly in our appeal, we questioned how the preliminary DFIRMs could indicate that a small polder, with a ring levee system of only 8.2 miles in circumference, would possibly have a requirement for 7 different base flood elevations. 

(VE8, AE7, AE6, AE5, AE4, AE3, and X) This entire polder is surrounded by a single levee of the same elevation and the ground elevations inside this sub-drainage 

district were virtually at the same elevation throughout. The results were nonsensical. In the South Lafourche Levee System, the Preliminary DFIRMS had similar 

unbelievable results. In some areas these maps indicated there were 5 different base 

flood elevation requirements within 800 feet all over perfectly flat ground. Literally, 

if the DFIRMS were to be believed in expressing the risk of flooding, two people 

standing on level ground, a mere 800 feet apart could be in two different flood zones 

and there would be three additional base flood elevations between them. This simply 

could not be. 

We began working through the appeals process with FEMA and were able to 

quickly identify the elements of the Flood Insurance Study that were causing the 

erroneous mapping as well as the limitation of the process that would allow the 

maps to more accurately reflect the threat of flooding in our area. In short, two 

items primarily caused the mapping problems. First, was the FEMA policy to NOT 

consider the impacts of nonaccredited levee in their Flood Insurance Study. This 

would become known as the ‘‘without levees’’ policy. The second problem was in the 

application of the wave model FEMA was using as part of the Flood Insurance 

Study for coastal levees. This model, known as the Wave Height Analysis for Flood 

Insurance Studies (or WHAFIS) had serious limitations when applied to long 

transects such as would be required in south Louisiana. 

We found that the appeals process was also limited in its ability to produce accurate DFIRMS. We learned these limitations as we took our appeals on these issues 

to FEMA including FEMA’s Region 6 office in Denton, TX. All along this process, 

we encountered cooperative and sympathetic FEMA employees who were powerless 

to make any changes that were not part of the official FEMA policy. Realizing that 

complete resolution of these issues would have to come from a change in FEMA’s 

policy, and that this change would have to come from Washington, we began to inform our Legislative Delegation of our quandary. In early February of 2011, twentyseven (27) U.S. Senators signed a letter to FEMA Administrator Fugate asking 

FEMA to discontinue the ‘‘Without Levees’’ policy. 

In March of 2011, Administrator Fugate announced that FEMA would begin developing a series of targeted modeling approaches to replace the ‘‘without levees’’ approach to identifying the risk of flooding behind uncertified levees. In one of the first 

publications that FEMA released to answer questions as to how they were going to 

go about making and implementing such a change, FEMA stated that it was ‘‘engaged in a systematic effort to reform the national Flood Insurance Program (NFIP), 

and we view a change in the manner in which we map levees that do not meet the 

criteria for accreditation as a step toward a long-term solution.’’ (See Attachment 

B for a full copy of that document.) 

FEMA began working on the change to their policy. By the end of July 2011, 

FEMA had put together enough of their revised policy to host a Community Roundtable Forum here in Washington. Approximately 20 people from various stakeholder 

agencies across the country were invited to participate in this forum. This was a 

very welcomed step and I can truly say that FEMA was working earnestly on the 

issues at hand. The main points that I was able to take away from attending the 

Forum was first and foremost, the ‘‘without levees’’ approach was history. Next, 

FEMA made it clear that the substitute process was going to be collaborative with 

the local stakeholders, flexible yet technically sound, and feasible in that the approach must be cost effective and not overly burdensome on a community. (A full 

28 

copy of our press release after this event is included as Attachment C.) But, the 

forum focused most of its efforts on the process and the basic revisions to the policy. 

We started to see that FEMA was still working on the technical side of the approach 

and we remained concerned for FEMA’s ability to develop a suitable approach for 

both Riverine and Coastal flood protection levees. 

We continued to follow-up with our friends at FEMA who were working on the 

technical side of the policy changes. (Please see Attachment D.) We were hoping to 

get a better understanding on how FEMA was going to handle the differences in 

coastal versus riverine flooding; but, we were hampered by FEMA’s desire to release 

the Proposed Approach for Public Review, which eventually came in December of 

2012. After the proposed policy change was opened for a 45 day public comment period, FEMA did reveal that they were still working on how to address coastal levee 

analysis. Further, they realized that some of the riverine methods developed would 

not be appropriate for coastal levees. Finally, they also acknowledged the limitations 

of their use of the one dimensional WHAFIS model used for V zone determination 

was not appropriate in parts of coastal Louisiana. However, they stated that making 

changes to the use of WHAFIS was beyond their current study (the revised approach) and they were looking for ways to improve coastal analysis. They also agree 

to meet with us on these specific issues. 

In order to answer the call for public comment on the revised approach, we broadened our coalition to include questions and comments agreed upon by the State’s 

Coastal Protection and Restoration Authority, the Association of Levee Boards of 

Louisiana, the North Lafourche Levee District, the South Lafourche Levee District, 

the Lafourche Parish Government, the Terrebonne Parish Government, the St. 

Mary Parish Government and Coastal Oceanographer Dr. Joseph Suhayda. (Please 

see Attachment E.) Again, most of these comments centered on the difference between coastal levees and riverine levees. The draft, revised policy included pages of 

technical details on how riverine-based flood protection systems would be analyzed; 

but, it certainly lacked detail in how reasonable maps would be developed for coastal levees. As you can imagine, the flood source for coastal levees, typically a short 

duration tropical event, is broadly different than the flood source for riverine levees 

which is primarily driven by the timing of rainfall and snowmelt. Further, the arrangement of riverine levees, basically along the river, is different than coastal levees which intend to provide protection from backwater flooding. The two types of 

systems are so different that there is little opportunity to create one methodology 

that can be used for both. 

Following up on FEMA’s offer to meet with us further on coastal levee issues, 

FEMA helped facilitate a meeting with a small group from our local coalition in 

February of this year, the topic of which was centered on coastal levee issues. I 

must state that each time we have met with FEMA we have encountered a group 

of individuals that were cooperative in trying to produce the best product that they 

could, given the confines of their operational policies. I could sense that the recent 

proposed changes were giving them a better opportunity to produce a better product 

and they were enthusiastic about the new possibilities to produce a more accurate 

DFIRM. The most import points that our group took away from the meeting are as 

follows. 

1. When it comes to producing more accurate DFIRMS, no methods of analysis 

are ‘‘off the table’’ as far as FEMA is concerned. 

2. The process is not going to be black or white any longer. The process is now 

‘‘intentionally gray’’ in order to allow the utmost flexibility in producing accurate results. 

3. Where in the past, when trying to work with FEMA, we encountered a series 

of well intending people whose hands were ‘‘tied’’ by existing regulations; we 

will now be able to meet with FEMA personnel who are no longer encumbered. 

4. We can hope to see released coastal levee guidance independent of riverine 

guidance to draw a clean distinction in the differences to better assist FEMA 

mapping partners in handling Coastal Levees. 

(A full copy of the press release for this meeting is included as Attachment F) 

Overall, it was believed by all to be a very productive meeting. Yet we have a 

long way to go and as of yet, FEMA has not released the results of the analysis 

of all the Public Comments received. 

So, today, we find ourselves working hand in hand with FEMA on meaningful reforms to their policy only to be met by another looming expiration of a short-term 

extension of the National Flood Insurance Program. These are reforms that from 

our point of view began in mid-2009, were enhanced by Legislative intervention and 

a commitment by FEMA to improve the process in 2011 and are still being worked 

29 

on today. Obviously, changes to a process such at this takes time. And yet, the details I have provided today are the efforts to resolve but a single issue within the 

National Flood Insurance Program. There are so many more issues that can be corrected trough cooperative reform and a long-term reauthorization of this vital program. 

In conclusion, I would like to point out that ours is a working delta, the fruits 

of which are enjoyed by and enrich our entire Nation. From freight transportation 

on the Mississippi River to our oil and gas and petrochemical industry to our abundant fisheries, not to mention tourism, jazz and Mardi Gras, we simply must work 

and live within this delta. As such, the availability of federally backed, affordable 

and financially stable flood insurance is of vital importance to our region and the 

entire Nation. 

We thank you for this opportunity to share both our situation and our views on 

this important issue. We look forward to working with all of you to continue to 

make these changes to the National Flood Insurance Program. 

30 


509am001.eps

Appeal of Proposed Flood Elevation Determinations 

(Prctiminary DFIRMS) 

In accordance with: 

44CFR, Chapter I, Part 67 .. , 

Section 110 of the Flood Disaster Protection Act of 1973 

By: 

North Lafourche Conservation, Levee and Drainage District 

PO &~ 23ij 

RlCeland. LA 7(lJ9.f 

IIlld 

Soulh Lafourche Lc\'ce District 

PO IIIn426 

Gllliano, LA 7035-1 

Page 110112 
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509am002.eps

Table of Contents 

Page 

Introduction ................................................................................. 3 

General 

Approach and Methodology 

II Basis of Scientific Appeal................................................................ 6 

III Conclusion.................................................................................. 12 

General 

Suggested Course of Action 

IV Exhibits & Attachments ................................................................ 13+ 

A Prelim DFIRM in Drainage District 3 of 12 Composite 

B Drainage District 3 of 12 LIDAR 

C Prelim DFIRM inside ofSLLD Ring Levee east of the Town of Golden Meadow 

Page I 2 of 12 
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509am003.eps

ac men 

Introduction 

General: 

nl!! North LafourcJl!! Conservation, Leve!! and Drainage District (NLLD) and the South 

Lafourche Levee District (SLLD) are both political subdivisions of the State of Louisiana formed 

by Louisiana RS 38:291. Both thc NLLD and the SLLD w!!re organized ''for the PUI'Pose and 

charged with the duty of constmcting and maintaining levees, (also drainage fl NLLD) and all 

other things incidental thereto within its tmitoriallimits" as detined by Louisiana RS 38:281. 

Territorially, the NLLD's district includes all of Lafourche Parish north of the Gulf Intracoastal 

Waterway (GIWW), which bisects Lafourche Parish. The SLLD's district includes all of 

Lafourche Parish south of tile GIWW. As such, and jointly, the NLLD's and the SLLO's 

districts make up 100% of Lafourche Parish and this appeal is on behalf of the residents and 

businesses within the entire Parish as may be affected positively or negatively by the proposed 

DFIRMS. Further. the NLLD and the 5LLO are each making this appeal as owners ofrcal 

property which has been adversely affected by the proposed detenninations. 

It is important to note that it is not the intent of this apJ)<!ai to ll!!cessarily r!!duce or increase the 

final Base Flood Elevation at any specific location in the Parish. 'nle intent of this appeal is to 

have the maps corrected so that th!! actual risk ofnooding is accurately indicated on theSI! maps 

without overstating the risk of flooding in some ar~as whil!! simultaneously understating the risk 

ofnooding in other areas. 

Approach and Methodotogy: 

According to 44CFR, which addressl!s the Appeal of Preliminary revised DFIRMS the Parish (or 

an individual) can only make an appeal based on FEMA's DFIRMS b!!ing either tedmicallv or 

scil!utificallv incolTl!ct. 

«eFR 

§ 67.6 &lis/I[appeal. 

(a) The sole basis oj appealunlkr tillS palt shall be the possession of!aloli'ledgl orinjo/motion indicating that the 

el~l'afions proposed by FEMA Ofe scimtijicallJ' or fi!chmctJ{~1' I!1co"~cL [kcOl/se Scientific and fechmcoi 

cOirecrmss is often a mailer of iUgru rother than absol/Jf~ (l!Xcepl wh.>rJ mathematical or meaSllrwml error or 

changed physical collditiOI1S elm be demol1strol?dj, appe/Illms ore reqlliNd 10 mom1rate thai aitemaliw methods 

or oyplicolfons renill ill more correcl estimates ofbllS€ flood de-.'anoll$, thus demamrating 01a/ FEMA 's eSlimales 

are incorr~c . 

An appeal based on eith~r of these two directions (Technical or Sci!!ntific Error) has different 

burdens of proof and each requires differeni documentation. For a Tec1mically Incorrect Appeal, 

the detail and burden of proof is substantial and must be quantified. The Lafourche Parish 

Government has hired independ<!llt consultants and engineering limls to appeal the proposed 

DRIRMS based on technical errors independent of, but obviously related to this appeal. 

Page I 3 of 12 
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509am004.eps

ac men 

This appea~ filed by thc NLLD and thc SLLD is based on Scientific Error. The NLLD and sun appeal 

is made on a much broader basis identifying a pro blem in methodology resulting in incorrect maps and 

suggesting an alternative approach. This appeal will address all ofthe following . 

.uCFR 

§ 67.6 Basis of appeal. 

(3) If any appellant belims the proposed base Jlood elel'atiOllS are scientifically incomc( the appeal must 

d~ ollstrat~ Sl:ienlific mfomctnm by: 

(i) ldinti/J1ng /h{ methods. orasslImptions purported /0 be scz2IJl1jkally Incorrect. 

(Ii) Supporting 11'11)' the rnedlOds, or assumptions ar~ scientifically income/. 

(iiI) Pron'ding an alumaliw alla~rSlS ulJli:ing methods. or ass1lmptions pll1ported to 00 comc!. 

1M ProViding technical support indicating 11'11)' the appellant's thods should be accepled as more cOfficl and 

(v) Pro~idil1g documentation of aI/locations II-hm tlte app?fwnf's basejlood eiemtions arf dilfmntfrom FEAiA ~ 

/JSFR31644..lu/yl.19S3{ 

The basis of our appeal is as foll ows: 

This scientific appeal is based on the obvious problems in mapping 

caused by FEMA's decision to allow FEMA POLICY to override 

FEMA SCIENCE in the production of the preliminary DFIRMS. 

Typical of mosl CFR T.!gulations, the requirements found in 44CFR pertaining to the 

development of Flood Insurance Rate Maps, Flood Insurance Studies, Mapping of Special 

Hazard Areas, r-.. lapping of Areas protected by Levee Systcms, ctc. tend to be more descriptive 

than prescriptiR In order to provide a more prescribed approach to implementing these 

regulations for its mapping partners, FEMA, as part of its Flood Hazard Mapping Program, 

published GUidelines and Specifications for Flood Hazard A4apping Partners. ll1ese dOCllmet1l~ 

arc collectively referred to as the "Guidelines" and they reflect FEt>.IA POLICY as intended in 

the basis of our appeal as found in the previous paragraph. 

In addition, these same published FE~IA policy Guidelines provide great teclmical guidancc on 

the FEMA SCIENCE. also as intended in the prior paragraph as pan of the basis of our appeal. 

That is, these Guidelines provide detail on how to apply the various models and other analytical 

tools used in the production of revised DFIRJ..IS. This appeal does not take issue with the FEMA 

SCIENCE, not that it is necessarily correct; but, simply, beyond the scope of this appeal. 

More specifically, it can be seen time and time again on the prdiminal)l DFlRMS in Lafourche 

Parish that the POUe y decision found in the Guidance not to incorporate cxisting, noncertified 

levee systems into all pans of the Flood Insurance Study (SCIENCE) have resulted in erroneous 

boundaries b..:tween variolLs flood zones on the preliminary DFIRMS. These erroneolls 

boundaries between flood zones caMot possibly reflect the real risk of flooding in the indicated 

areas. Further, the POLICY decision to treat a non-certified levee system "as if the le"ce did not 

exist" will certainly result in the overstating of fl ood risk in some areas and the understating of 

fl ood risk in olh.!r areas. This is an lUlacceptable result. 

Pagel4of12 
34 


509am005.eps

Inmicaliy,l/Ic >alIlC GUidance tbat IIO\\'$an ~xi\tiognon-Q:flili~d Im:c to be included in one 

anal}1ical model (ADCIRC) produ,ing Sli11 Willer Elcl ~t;on;; prcdud~ it rrom being LJRd in 

another following llLalytical mod.!l (WHAFIS) cOlI~idcting the lffcclS orwm:s. Funh~r lhe 

Guidance g<lC1 on to say that the mapping p.1Jlncr should use ~judgmenlllOd c~perietl~ e", 

"historical data", IlJId r.!l'icw the r.:sula "(rom I rommon..sense viewpoint" in producing tht: 

OFlR}..IS. We !ubmilthat these Guidance tidbits an.' diamclricaJlyopposcd alld. in our c.asc M,I'C 

pmduccd unacrcplllblc.results 

The rollowing section prUliks more specific details OIllhis appeal as well as real world 

c~ampl~ orlhe problems cau>l'll by FEMA', POLICY decisions. 

Page I Sol 11 
35 


509am006.eps

,J'FM'!"W!I'" 

11 Basis of Scientific AIllleal: 

TIle indi\'idual items in blue below are the issues that must be addressed ifan appeal is going to 

be made 011 a scientific basis. TIiese items are taken directly foml part 67.6 of 44CFR which 

regulates the FEMA DFIRM appeals process. Following each of these items are details of OUI 

appeal. 

"aR 

§ 67. 6 8a~ i5 of appeal. 

(3) if any appellant be/i(1.·tJ the proposed base flood o! /lIl'arions are scientifically incorrie!. the appeal mllSl 

del1JOllStral<' scientific incorrec/nw by: 

(I) Itknri/)Mg 1m methods. or asslJmptio/!S pllrpor/ed to be sdl!ntifica!l.~ incorrect 

Among olher things, Ihe process for producing a DFIRJ\" includes lIsing a model 100 year (1 %) 

stonn to produce 1% annual chance Still Water Elcvations (SWEL) in a given area. In coastal 

areas, it is r1!3Sonably presumed thai in addition to fl ooding caused by the SWEL, the same area 

may experience additional wave hazards at the same time. 'IbIIS, the Guidance includes Appendix 

D: Gllidancefor Coasfal Flooding Analyses and "'lapping to provide some prescribed policy 

towards assessing the risk caused by Siorm wave characteristics. Overall, these two steps seem to 

be a reasonable scientific process of detenllining compounded flood risk. 

However, thm exists a FE A "policy" that interfer~s with this modeling process in producing 

DFIRMS.lllis policy requires the modelers to remove all noncertified Icvees from the wave 

analysis b~fore proceeding, 

From the Guidance: 

Appendix D: GUidancefor Coastal FloodingAna/yses and Mapping 

0.2.3 Evaluation of Coastal Structures [February 2002} 

The pwpose of the el'aluation is /0 delemline whefher each indil'idual coastal S/I1JCfUre appeal)' 

properly designed and mainfained in order 10 provide protecfion from fhe l-percenf-annual-chance 

flood. If a particular sln/Cfllre can be expecfed to be stable through Ihe l-percent-annual-chance 

flood. fhe Sfl1/Cho-e geomefry may figure in all ensiling analyses of wave ejfocfs accompanying fhe 

flood: coastal etas ion. I1Inup and overtopping, and w(I1'e crest elewjtjons. Orhe/wlse. the coastal 

stl1lcture is considered to be destroyed during the l-percenl-annual-chance flood and remol'edfrom 

the transect representafion before proceeding lI'it/l anaZwes of wave ejJeclJ. 

TIlis removal of non-certified levee systems prior to the analyses of wave effecL~ is supported by 

other sections of th~ Guidance as well. 

It is our contention that complete removal of existing noncertified levees, just because they are 

noncertified, corrupts the scientific process described above and this equates to a scientific error. 

Page l6of12 
36 


509am007.eps

;;eFR 

§ 67. 6 &sis of appell/. 

(3) if anJ' (Jpp~lIant beliel'es dIe proposed base flood el~'atioos are sdentifkally incorrtcL dl~ appeal must 

demOlls/ratt scientific incomc/nes;,' by: 

/Ii) Supp<Jrtmg why thi methods, or asslimpliOlls are sdentifically im:on"eCL 

ac men 

Pr,;:tending, for the purpose of "policy" that a levee system does not exist, when it is in fact a 

substantial geographic feature is akin to loading the models with erroneous data. As in all such 

models, the old adage, "garbage in == garbage out" applies. All other fornls of substantial 

geographic feature Ihat impaL1 the hydraulics in their vic.inity are included in the PIS. Such 

features include certified levees; but, they also include natural ridges, highway and railroad 

embankments, sand dunes. etc. II is clear by looking at the DPIR S thai the lines which divide 

the VariOlLS zone boundaries are not being influenced by these substantial geographic features 

(levees). As such, the required zones within a levee system are likely overstaled in some areas 

and it is just as likely that the zones outside and adjacent to these features might be understated 

in some areas. 11lis concern is expressed in the Guidance il~etf. 

From the Guidance: 

Appendix D: Guidance for Coastal FloodingAnalyses andMapping 

D.2.3 Evaluation of Coastal Structures [February 2OC2} 

Flood protection stn/ctures can hal'e a significant effect on the flood hccard information J'hown on a 

FIRA{ perhaps dfrectly jllstijyfng the removal of si:able areas from lhe coastal/ugh hazard area. 

The focus on flood protection slmclures in the PEMA memorandllm cited abo\'e should nor di .... ert a 

recognition Ihat similar considerations are appropriate in crediting the protection provided by 

stmctures in categones other than those named in the memorandum, and that Sllch credit can be 

important. In contrast to flood protection. a brea/..1vater primarily may actIO limit WGl'e action and a 

rel'etmem primarily may control shore erosion. but any stable coastal Slrncture can notably affoct 

results of .... arious hazard ana(rses for the l-percenf-annual-chance flood, and the Mapping Partner 

shall take these effects into accmlnt. The PEMA memorandum places the responsibility on local 

interests /0 cel1ify new slrncrures, but the primcwy consideration in a Flood Map Project must be that 

the stme/llre eraluation yields a correct judgment based on omilable evidence. This is necessary for 

accrlrate hazard rusessments. because a stmclllre might decrease flood effects in one area while 

increasing erosion andlJ."G\·e hatards at adjacent sites. Of course, the greater the potential effects of 

a coastal structure. the more detar/ed should be lhe emlualion process. 

As a result, the elevation zone boundaries shown on the maps in many areas ofth~ Parish have 

no correlation whatsoever to real world fealures as you would expect a true scientific study to 

indicate. 

One example of this obviously inaccurate DFIRr.,'i is foood in Attachment A. This attachment is [\ 

collage of three DFIRM P:Ulels (Map Numbers 22057C0350E, 22057C0355E and 

22057C0365E) so that a real world example of erroneous mapping can be demonstrated. TIlls 

attachment has been highlighted to include some real world features that appear to have been 

missed in the mapping process. Highlighted in red is the location of an 8.2 mile ring levee 

system originally constructed by the USDA and currently maintained by the Lafourche Parish 

Page l 7of12 
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509am008.eps

GOI ~rnm~nt and thc NllD. l'rcsently. thc dCI'ation at the ccn erlin~ of this lel"cc system i~ 

approximalCly 5.5 feet or greater throughout its length. This suh drainage district has a series of 

major inlCmal drainage channd~ highlighted in blue leading all areas of thc basin to its two 

pump stations as indicatcd.lIDAR mapping (Sec Attachment B) forthe same area shows that 

the ground cI~vat on in the area is nearly at th~ same del'ation throughout the district. 

Gil'cn these real world conditions, the wave ron-up \I'hieh ecnters and peaks on tranSlXt5 just 

outside of the highlighted ring b ·cc system indicates that thc ring ICI'cc system was not at all 

considered in thc wal'e analysis. ConseqllCntly. this small drainagc sub district includes 7 

different base flood elevation requirements. They include a YES, AE7, AE6, AE5, AE4, AE3 

and an X ~onc. 

The lines separating these 7 base flood cic,'ation zones have no correlation to any features in the 

real world. Pretty mIlCh anywhere in this area you could hal'e two people. standing 500 yards or 

less apart from each other. looking at each other eye 10 eye. and there will be 2-3 different base 

flood dcvation requirements betwccn thcm And the land betwccn them is flat from one person 

10 the other. This simply can't be. 

Further. this obviously erroncous mapping process must hal'c an effect on the adjacent ring lel'ec 

systems. similar in makeup \0 the highlighted one, to the cast and southwest of the highlighted 

system. But what effCC! might that be if the nonccrtified Icn:cs orall of these S)'SlCms WCTC 

simply ignored in the W31'C analysis' As a final demonstration of the nonsensical along this same 

transect just southeast of the highlighted system is Lake Fields. lake Fields is a significant. 

completely open body ofwatcr. HowCI'cr, the result of this mapping process is to reflect an AE7 

Zonc in the northcrn and southern pans ofthc lake with an AE6zonc in thc ccnterofthc lake. 

No VE zones in the lake. just on the shore. 

Attachment C show~ a similar situation inside ofthc SlLD ring 1~I ec system. Hen;, the 

DFIRMS indicate a circular shaped VEl6 Zone encircled entirely by an AE15. which is cireled 

hy an AE14 which is then circled by an AEI3 centered along tranSlXtl3 as shown on the maps. 

At one point. there arc 5 different base flood elel'ations witbin 800 fect of each other. again ol'cr 

perfectly flat land. 

Common sense tells thc mapping partner that if the !c1'CC is topped (or cI'en breached) thesc flat 

basins. with largc internal drainage features will fill up fairly cI·enly. As such. thesc maps should 

reflect far fewer required base flood eh~\"ations. 

All of these obl'ious errors will be a prclly hard sell to the residents and businesses of these 

areas. Such errors will greatly reducc overall confidence in the DF1RM products throughout the 

Parish. Worst scill is that this process almost ccrtainly understates thc risk of flooding in some 

areas. These obl'ious errors themselves arc evidence that the policy of removing thc non certified 

lel'ecs from thc wal'c analysis is a scientifically incorrcct process. dictated by a policy decision. 

It would appear that FEMA's premise \0 havc a policy decision COTnIpt a scientific study is to 

indicate concern on behalf ofFEMA that they lad confidence in a nonccrtified ICI'cc to protect 

hes and impro"ed property. That may be so and a I'alid concern at some level. Howel"CT. the 

Page 1801 11 
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ac men 

complete removal orthe levee system would only occur in the real world irthe entire levee 

system were topped and breached throughout its entire length. There are countless examples of 

Ihese earthen levees being overtopped for miles without any or very limited breaching. Finally, il 

is a corruption of the scientific process to r~move a levee from the wave analysis before it is 

lopped jLL~1 because it is not certified. 

NCFR 

§ 67.6 &sis of appeal 

(3) 1f OIly app~lI~nt beljln'iS Ih~ propoSl1d basejlcod ~11n ati<:'!s ar~ sfUmijically mcorrecl flu appeal nmSl 

demonstrate SI.:ienlljk mcorreclness by: 

(iii) Pnwjdlng an alI~m ril'i' ana~'sis uniilmg me/hods. or (WlunpfimJs p!lrp0l1~d /Q b~ comet 

What we propose as an allcmative is not really an altemative proCl:SS. For the most part, we can 

agree with the process described in the CFR with the additional Guili'lnce e.XC!!pl for 

indiscriminately r!!moving tloncertified levees from the wave analysis. We propose that FEMA 

should complete the modeling portion of their FIS with all certified and uncertified man made 

levees included in all phases of the modeling and mapping process so that these features can be 

fully accounted for within the FIS at all locations. (i.e. Let the SCIENCE run its course.) 

After the output of this modeling and mapping is complete, FEMA could then consider how to 

address the risk to property within those levee systems that are not certified. As such, a 

compromised elevation might be required even where the modeling shows no overtopping or 

limited ove110pping and filling of the basin. The zones within such a basin could then be drawn 

along logical geographic features within the basin proponionate 10 the perceived threat. TIlis will 

result in maps that the local residents and businesses can be lieve in. 

It is easy to forget that Ihe publication of these maps is not in and of itself about safety of the 

residents. They are published for insurance reasons and to establish building elevations Ihat 

reduce the risk of flooding. Hopefully, if and when it occurs, this Ilooding is the flooding of an 

unoccupied building. It is only when the citizens have no confidence in the maps that they are 

likely to ignore the potentiaillooding indicated and remain in the buildings during a stonn event. 

However, this process of applying a policy decision (an adjustment in elevation) after the best 

science is allowed to run its course should not be arbitrarily made either. Historical data and 

common sense should factor in as well. This approach, along with local input is fully supported 

in the Guidance as described in the ne\1 section . 

.uCFR 

§67.6&sis ofappeal. 

(3J if any appillant beiii'l'eJ!he propo~"t?d bas~ flood di'vuti!f!S ar .. sdm~fically incorrect flu appeal mUJ"t 

demons/rali scimtific incorrecfneu by: 

/1\') Providlng tecimical suppon mdicaring IIfly the appellant's melhods should be accepted as more correcl and 

Pagel90f12 
39 


509am010.eps

ac men 

With the risk of being too curt, the appel lant 's approach is more correct because it does not 

ignore realit\', Some of the non-certified levee systems which have been removed completely 

prior to the wave analysis have a foot print of 100 to 300 feet in width and an elevation of 5 to 15 

feet above sea level. Many are massiw stmcturcs by any measure representing 13 to 145 tons of 

material per linear foot. Most can be seen from space. Any such objects, be they man made, 

natural, certified or not certified should not be ignored at any part of the mapping process. 

The Guidance documcnt tcnds to indicate in many sections that after all the best efforts, 

historical data and common sense of what is a reasonable mapping result should prevail. 

From the Guidance: 

Appendix D: Gllidancefor Coastal FloodingAnal)'ses and Mapping 

D.2.3 Evaluation of Coastal Structures {February 2002} 

..... Where complete information is not available for an existing structure, the Mapping Partner 

perjarming the analysis shall make an engineering judgment about its likely stability based on a 

visual inspection of physical conditions and any historical evidence of storm damage and 

maintenance . 

.. The FEHA memorandum places the responsibility on local interests to certify new stmctures, bill 

the p,.imary consideralion in a Flood Map Project mllSl be Ihat fhe sflilclZlre el'all/ation yields a 

correcf mcigment based on amilable evidence. This is necessary' for accurate hazard assessments. 

because a sllucrure might decrease flood effocts in one area while increaSing erosion and waw 

ha.::ards at adjacent sites. Of course. Ihe greater the potential effects of a coastal stll/chlre. the more 

detailed should be the el"aluCI/ion process. 

0.2.7.1 Review and Evaluation of Basic Results [February 2002] 

Prior to mapping the flood eleVa/ions and zones, the Mapping Partner shall review results from the 

models and assessments from a common·sense viewpoint and compare them 10 OI'ailable historical 

data. When using these models. there is the potential to forget that the transects represent real 

shorelines of sandy beaches. rocky or cohesil'e bluffs, wetlands being subjected to extremely lugh 

water. WOI'es, and winds, Familiarity and experience with the coastal area being modeled or similar 

areas should provide an idea of what is a "reasonable" result. 

Use of the historical data is also \'el1' imeortant in em/uating whether the results are reasonable ... 

n. The main point to be emphasized here is that the results should not be blindly accepted. There are 

many uncertainties and variables in coastal processes during an extreme flood and many possible 

adjustments to methodologies for treating such an event. The validity of any model is demonstrated 

by its success in reproducing recorded events. Therefore, the model results must be in basic 

agreement with past flooding patterns, and historical data must be used to evaluate these results. 

Page 110 of 12 
40 


509am011.eps

44CFR 

J'7.6Bai",/."..,L 

(1) If ..",1ljJptI1am klkow I"" prof)IJHII b • .fIood .kwI""" In 1f"0fflIlficu//Y """"'""'"~ iii< appt<II_1 

"," If"Int!i{Of iltrontr/1ll!$s ", .• 

As mentioned previously. besides the examples cited in this appeal. the problems of 001 

induding Don certified ICI"C\! SystCll1S in wave analysis appears on the OFIRMS whcrcl·cr FEMA 

chose LO utilize wave analysis in iLS mapping process. 

Page I II of 12 
41 


509am012.eps

J J J Conclusion 

General: 

FEMA 's policy appfl)3ch of removing nonccrtificd levees before running wave BIlalysis and 

producing OFIRM maps is scientifically unsound, This approach to mapping produccs OFIRMS 

that indicate base flood c!CI'ation :rones, the boundaries of \\'hich, hal'C no correlation 10 real 

world features. Such maps will not be accepted by local residents and businesses, 

Ignoring the impact ofnonccnificd lel'ccs nccmarily yields results that Ol'erstale the risk of 

flooding in some areas and understatcs the risk of flooding in other area, 

FEMA 's Mapping Partners had insufficient infonMtion, familiarity BIld experience to realize the 

"'::$ul\1l ofthcir mapping cITo", we...:: not a ...::awnablc ""uI!, 

The modeling and mapping results are not in basic agreement with past flooding paltC111S and 

historical data, 

Sllggested COllrse of Action 

In mas where FEMA Guidance suggests the r.ccd to run 1I1I'C analysis to augmcnttoc SWEL risk of 

flooding. noncerrificd Imc s~cms should be fully ronsidrn:d in tOC IIl\'Canal}lis and all pans ofthc 

DFIRM m;lpping process, 

Areas aITecti:d by ~ noncmificd icl'CC systems (insiok and adjacrnt) should be singkd out for special 

romidomnion and potrntial adjUStlllCnt to the rc$ults of the m;lptJing pmn'ss 10 Com~lc for the fa<;t 

ttlat tlle !eI'ees arc in fact not renifii:d. 

The prcliminary results of this at\31)~is sllould be sbaml with local officials to impart additional 

information, familiarity and historical cxperience into the final mapping product 

Page 112 of 11 
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-.-

\ 

--

• 

, 

I."".'.' ,,,,!'j , ""0. .... ,, ••• ' .... , l,."l 
43 


509am014.eps
44 


509am015.eps
45 


509am016.eps

FEMA's Approach to 

Levees 

Answers to Frequently Asked Questions 

Q, Why I. n :MA rhnging rh., wa)' it m. p' Ie,,,,,,,? 

A: The ~withO~llc\'cc" approach is an cfTccthc looltQ identify flood 

risk behind uncertified Ic'-ccs. FEMA recognizes. howevCT. thai 

advances can enable FEMA to use improwd models lind tools to 

provide more precise flood risk information. and we arc commiuoo 

to updating our mapping rrn:lhodology. FEMA also is l11gagcd in a 

systcmalk effort to n:fonn the National Flood Insuraocc Program 

(NFl!'). and we view a change in the manner in which \\ ~ map 

levees thai do not ~Cl lhccritcria for accreditation as a step toward 

a long-l('1lt1 solution. 

Q: What is FEMA doing to iml'rOI"e its analysis oflcn:'ti? 

A: FEMA is developing I series oflllrgclcd modding approaches to 

.... 'Place thccurrcnl "Wilhoul c\'ce~ approach 

Q; Me .'EMA ~nd 1M U.S. Army Corps of Enginetrs (USACF.) 

~Iignid in this effort? 

A: FEMA and USACE hale 1:w..'t:n:md will continue to work as a 

tcam to de_clop the new approach. 

Q: Will tbe public bt im'olnd? 

A: Ycs. FEMA will invite the public to review and comment on lhe 

new apprQ:lch and subsequent guidance. 

Q: What ~boUI map! alrtady ill effect? 

A: The new approach "ill be applied loongoing and fut ure mapping 

projects. If a comm\lllity hasquCS1ions about C7;iSling Flood 

Insurance Rale Maps (F1RJ\ts), il should coordinate witb the 

appropriate FEMA Regional representative \0 discuss future map 

updates. 

l .. H Sys,""" ---_ .. ____ """tile 

IlMeCle<li:l!led 

i>'Ii'"oot/lOfEW! 

...... ~ ... rM."Off>\'''' 

,pm,..,.rrv:ldOI_ .......... 10 __ 

ony~)OII._ 

.--

The NIlP 

l.ooII.OItIl"''''''''.'''''''' ...... on 1l"oO~ _ _ """""'" 

Pr\JWOm?~ 

_,.. ... 1"' .. 

V""can.loor lnd ~ 

_)'OU'IIood'~rrv:I,"",1O 

rird . flood ........,..eon M. 

-Dpf5nBg ..... 

FEMA Ubr..,. TIle f£M.I ~ ... da_ 01 

_FDAA,""""""" 

r.Ia "'_ko"--' 

....... 

·NlIPandlt\<oes.l<1 

o..n;"., fo<f S/Io<I' 

1I!IR:! ...... lmptll!! 

rmMeo!!"lI"'d!l'ZI!-

"" 

..........."t-eSWemo· 1nI .. IoI ~o.-s· 

brurllw««_ ..,.'kQ!lII'I!/l'b 1I"'P·!lttililo?14) 

"-UofUCfl! 

So<:tDI 1l.'HQ: ~ 

01 _ P!o!e<U<I tIy 

--

RiskMAP 
46 


509am017.eps

Q: Wil1tbr new .pproarh result In !maller 

Sperilll flood lIaurd Areu (SFlIAI)? 

A: NoIIIII'3YS, SFHA~ maydcma~.inereasc or 

~y Ihe same Slie Ii a ITIUIl ofllK'-ncwapproach. 

The currenl appmac/l y have OWrc5limaled or 

undcrcstimaled flood hlIlardi lO S<)/TIC CXIL'll1. In 

SQmc ~narios. the anlidpalcd flood risk maybe 

greater than pm ioul ~ identified using our ~UlfClll 

qlproach, 

Q: Will this no.'\\' . ppruach Imparl insuranrr 

rales? 

A: The rate will be based on Ihc flood haard 

id.:n llfled Ihrough Ihc new ~pproach IIId other 

factor.; in\'oll cd witb the patticular struclure beiQ& 

"iled, bUI Ihc metitQd ror ""lint; ir nOi eh.anging. 

Q: Will"!::",,, wnsider Il"'ff! \\ilh less tb ln I 

l00-)'ear Ie-'ct of prolKtion? 

A: Yes. FEMA IS 1\I131yzing I1lilre prcci~ ways to 

model nood risk behind icl'm thlI ! 1l' nOi. CUITCl1l1y 

aceredilcd lO prtlIIid ~ prolcrliOll !gili~l a I-percrmannUlI-chance flood (IOO-year flood). As FEMA 

ronlin ~ work 011 NFIP rdofm. we ",ill uw<:slig31e 

lIa)"i 10 man: acturnlely rnlcpoUdcs in mas 

behind Im~ wilh less than 1-p<TCC1It-armual· 

chance flood proll'Clion. 

Q: Wh)' (IIn't FE~I,\ t~ theR )~ of 

inSUr:llnce pollcin fool y? 

A: Rating policies in areas behind kl'tcS ",ilh Its! 

IMO l·perccnt~nmt.'ll{:tIance Oood p~tioo may 

require nell' Ql'modi~ed nood risk wnC!llllatdo 001 

e~i,t today. Thi~ and olher con~idcr:llion:s may 

n:qurre Il'gulalory and Icgisla i\~ chllll.<,'I."l. 

Q: lio>l' soon will th e n~'" ~pprou es b~ 

d~l optd nd in pl n~ ' 

A: A dJtc i. not)'CI lei for implcmrnl:l!ioD, bill 

FEMA i$ wortinl!,lo imp~mC/1t a nl'Wappmach as 

>onnllSpoiSibk. 

Q: Is thf ntl\' ap pfoaeh going tn be applied 10 

~vpry nell' mapping Iclil'il)' with unllccrtditt'd 

tevet!;. or do rommunitlts Mfd 10 rtqurtl t It? 

A: Ii will be appliro 10 aU ncwBnd ongoing 

o\!lpplOg activitics, 

Q: WIIIIII~' rommunhy . odlor le\'1:'f uWDtr stitt 

be req uirfd 10 pm\-idr .. EMA d~la? 

A; res. The dJla rcqum:OlCrlls far levee 

actrediulron rn 44 C.F,R. $cclion 65.10 will nOI 

ch~nge. nnd 11101'1'- pn.'Ci~ moddrOI; likely will 

r.;quire mort I~IW data. CommuniU.:s andIor lel'Ol: 

owners stili will need to provid.! data on their IClec$ 

to ctt:lble FEMA lO ucurately asM.'SS the nood risk. 

Q; If. tomrnrtn ' dDts nol agrl:'f lI'llh Ihe 

FEMA 15 nit'd irl iIi flood rls~ stud)'. nn it 

prol'ide FEMA '!I'jth . dditiuna l or mure dela iled 

i.rrOrmltion? 

A; Yes. As with any study pcrfonm:d by FEMA. 

local communilies can provide-additional 

iMonlIJ,uon for com;dcrotioo. 

Q; Cao a wmmunlt)' slill !lPIW~llh~ lindings on 

tht FtR.\I? 

A: Yes. The i!dministl'luilc process currently in 

clTeet fOf flood ha:anl nlJjl5 wdl fl.1l1aru unchanged, 

There will be iIll adminislr.Ill11 .. appeal period 

rl'lllowmgi~ uancc Q/'lilc pn:limill.l!Y FIRM during 

which I .ommunity can prm'id~ additional 

SClcmifit nnd Icchnu:al da(a. 

Q; Ito,," '!Iillth~ nfw . ""mlleh imput th f ( 0)>1 or 

FElIA', flood sludifl? 

A: We an:: anticipating additiorul o;olll; ror a (l,;pcr 

level of analysis. FEMA wi t! cI'altllllC Ihe COSI of 

llpplying additional analyses againr.t the Illlue added 

for A particular ItMY or oornmunity based on Ihe 

risk present in Ihat area. \\'hm: lIlere arc high Imls 

of ri>k. additional analysiJ may be ~ppropri.l.IC. 

Q; Will F[;\IA lp p~)' ror rmirtclltiQll Qr 

lnl'fti? 

A: No, FEMA 'sao!ltonty and mISSion an:: In lhe 

id~ntifica li on or risk and not in the ISSCS>ITlCnt or 

the do;sign. COII.iln.icUon :md maioten:mce of ICI'ccs. 

Q; Will FI1MA finalize mll ps for communitiH 

using Ihf "without Hfe~ In~ ~~is ? 

A: No. FEMA will dday finJ i~ ng maps for 

communill(!S I\llcre a levee cannO! be accrediloo 

unlrllhc new appfOIH:h IS finalitcd. 

RiskMAP 
47 


509am018.eps

EncutiI'C 

Director: 

Dwayne Bourgeois 

Commiss ioners: 

Ronald AdGfns 

Lonny Babi~ 

Keitll Ba~r 

George BrooSSCIni 

TEd Faigotlt 

Cory \(Ief 

LlfIY~f\Qe 

KeM~ey Matilel'fle 

Rev Nolan Smith Sr 

PRESS RELEASE For Immediate release: 

3:00 PM 8/1/2011 

levee Analysis Mapping Project (LAMP) Community 

Roundtable Forum, July 26'" 2011, Washington DC 

Lafourche Parish President Charlotte Randolph and I were among 20 or so people 

from communities across the nation in~it l'd to attend the LAMP Community 

Roundtable Forum last week. LAMP is an initiative by FEMA, at the request of 

Congress and communities such as ours throughout the United States, ode~e\op 

alternatives to FEMA's current policy of not ronsidering non·accredited levees 

during a Flood InsuranceSl udy (FIS) as used by FEMA to produce Flood Insurance 

Rate Maps (DFIRMS). DFIRMS set the elevations to which a structure must be built 

in order to re<eive the most favored flood Insurance rates. 

FEMA began the effort to revise their policy several months ago. In this meeting, 

FEMA revealed the basics of their revised policy process for giving some 

consideration to non-accredited levees during a FIS for a community. This change 

in process is ~italt-( important to all parts of Lafourche Parish be<ause none of our 

levees are wrrently Federally accredited. 

To ignore the impact that our levees have on the movement of storm water by 

pretending they do not exist because they are non-accredited was simply bad 

science. Such was the old practice of FEMA in performing a FIS on non-accredited 

levees referred to as the ·without levees" practice. FEMA now assures us that the 

wi hout levees· approach to mapping is going away. They also stated that key 

points of the new policy and process is that it will be: 

Collaborative with the local community, 

Flex·ble yet technically sound such that the mapping effort produces credible maps 

for the community behind levees, and 

Feasible in that the approach must be cost effective and not overly burdensome on 

a community. 

This in itself is a major step in the right direction. Additionallv, they proposed the 

creation of a -local Levee AdvisoryComminee" for each community to collaborate 
48 


509am019.eps

dirKtIv with fEMA durini the map!>ifte effort. This locallM!e Adviso,,! CommittH wiD be able to help 

FEMA underm1ld the particulu ,irrum\UII«S that pertain 10 ~a';' OOIl1mu"ity and p<odoce c.re<lible 

maps 1>a\1!'d on iI technically sound ~P!"~h, 

M~t of tilts meeti", W<IS foeu~ on FEMI\'s planned rt'Visions to tile lEMA policy lind the prOU\\ 

it<eIf. as OOIl1par~ to clIa~ in the technkal evillu.tio"s side of 11 FIS Thev ~re "l~"Iy look", to ~et 

leedbilck Iro", this ,roup ilto \!Ie SIIitabilil'j of the cha~ In p<OCHS. However.they ~d suu~t iI lew 

broad categori~ lind citCllmltances by wIIicIl 11 levee ¥tem "'icht be anlllVled lo< ,onsidefation. 

Unjonunalely lOf us. Hie e.amples ~ were .11 for f~rine type Hooding lind tI>e-!. as of yet, did not 

revelll o.nylhina concelll'na tlleir ~roadl1<l c<)<lSt<ll flooding. The-,- did st<lte d~.~y that . technically 

sound approa<:n WM be;f1I and m~t be developed fa< ooth rtIoerine iInd coMtillle\'el' systems, Sut, tile 

HMA lell<> "" lII .. d eeuld Mt provide additional dct~b en how COIISIIII ...... , would be handled when 

11Iike,ltnem. 

They ltive ilso introduced the word "'eilCh' in!C t!Ieir FIS ~rnrollar indlcil~1IfI that they wi~ ronsid ..... 

mes not jult ill their enlir~: but. IM!rll ~iI1ed readl ef piKe of a Iev!!oe. TITs india ~ a 

w"lingn~1 to con'>idel mappi", in Ii"", det.ii, 

The meeting WiS set up to soIjc~ iInd record the ~ oftl\e p,ilrtidpants tr.-ouch "'ci~ 01 thl' 

f~ FIS and OFIRM "'3PP"& process 00 mod: communibes, Doe IUd! mod commu" il'j was thl' 

South l.lourdoe lev"" Sl"tefIL They used the ~O sVSlem "",~u'" they hove .uch det~il on this 

sY"tem. But, the df~1 did nol r~veal arlf true imiaht into pol .... ti ~ mllpjlin& outcome.ln\teid, ~ WlI\ lin 

elWllple of }<I.t how the p<ocesl w~1 be diff ... e"t in tile future. 

In the end, tile process should itliow more d(somlOo and o:rwsight by tile 001 communiI)' i" tne 

m.ppillfl proc..", and i, 01Mou."y twtte, that the proc",s w". ot/y in placl. 1Iut, ~ Ie ..... uS in • 

position 01 "in working with mM to decide ill.! wNt i. lind is not ledloically 5OOnd, A5 s~ch, we will 

lIill be in a posilion of "no>go!jation" and I'm root Sure what di~te resolution would be wor1o;ed out. 

In ~~ion to tile huge pile 01 OOIMl!ntS .nd SIIllie'llions we pve fEMA ourselves at this meetlnt the 

entire group offered ~me VlNy """'tructi~ SIIgge'ltioru io how Ih..,. un rnprcwe tt>e;r proposed 

process and policy. ffMA's ne~ step is 10 take all of this infOllllation In1<l consldefation and pllllheir 

updated pojicy out lor pllblic: OOIl1ment sometime within In. "ell mooth. II , II~'" the 

suggestions b\ltlle &"oup were very good. If fEMA iotorporates.t Ie •• t the miljor pointlmade ilt \hi. 

meeting into their revised policy, li m autiou!.ly optimistic l!\at the tvi~ poq win provided for 

rellSOOibi. and due con~der.t.ion 01 our noo'lI«r~~ed levees in the future revised DflRMS We will 

conl;"ue to follow this!'fOW' lind the reviled fEMA poIi<y V!T/ dose!y. 

1l'w3vne Bourge0i5 

NllD Electrt .... e Direaor 

Visit us online at: 

WWW.NlCLDO,(om 
49 


509am020.eps

SOny, I fIIst r~lled ttw.1 h3dn'( gotttn h;Idt with 'f<l'J ~ now th 1 we h~ve in fiild d the opportunity 

10 is~e our draft report to..- pubro:: (:t)mment. 

I m eno.:Io5inB ~ file thill D\lr coilSlal engir.etll developed 10 help specifi<:~Uy an5Wtr questioos 'f<l'J mi'f 

h~ ve r~ ti"" to how this draft ~~rO<lCh y be pp~ed 10 (J)<IstaI ~fm once fll1~li!ed , In addition, ou r 

e'1l!mri .dso dMioped the below write-up Im el! on lheir ~mption WI you wD\lld be interaled in 

how the ~pproach ~~ wrrently drafted mighl be applied 10 II>e I.iIr~ 10 Gokle!1 Meadow Hurricane 

le'oft System. I have induo:led th~ di5QIi5iOO; howfver, this is still" draft 3pproach 300 is wb;ect 10 

5ignific;lnt modification as the r=~ of the public review ~i. 

(Possible application based on current \'I.'fSi(lf1 of draft approach) 

B"""u~ th~ i" ltlilJl vrll l~ L!IIv)l: Iv avid!;!, M"",dvw liulliUUlt L~v..., Sy)ltllll:o\JXt:dS 

60 square miles, the Natural Valley Procedure may nO! yield a reasonable result under the 

draft approach. As a result, a detailed study of the entire k~' .. ee system woold probably 

have to be undenakert where one or morespe.:ific failure locations coold be explicitly 

analyzed, as described in the anached document. The noodplain resulting from the 

Structural-Based Inundation Procedure wwld be some oomposite of each of the scenarios 

analyzed. 

In addition to the pending revisions to the levee analysis guidelines, we understand that 

there is wideimerest in additional details ofth~ coastal nooding analysis 

procedures. Unfortunately all other ftspe.:ts of the coastal analysis process fall outside the 

scope of the current Ie>'ee·related erTor!. One panicular area of interest we wwld like to 

acknowledge rdates to concerns about the ~pplication of the l-dimemional Wave Height 

Analysis for Flood Insurance Studies (WHAFIS) model. the rewhs of which yield the 

locations of coastal V lones FEMA guidelines require that a steady, uni-directional wind 

be applied for analysis of wave growth along tach WHAFIS transet:L Both the cyclonic 

nature of hurricane lIind:;. and the speed of most hurricanes. wggestlhat a single lIind 

speed blowing in one direction along a tran~tthat is tens of miles long does not 

accurately represent the nature of II hal occurs during a hurricane. 

While Ihis panicularconccrn 11;11 nO! be addressed within th e currenl study, please be 

assured that FEMA is presendy looking for ways to improl'e our coastal analysis 

procedures, including this issue specifIcally. 

Hopefullyth~ diatog is helpful in eovisioni"" how the new ilpproiith miV be~;ed 10 coastal ~re..s and 

vour area 5petific~y . If 'f<l'J woold like 10 hiVe more dialog on this Mue, I will Jladly pull Iogt'tr.er the 

right lolb to talk with yoo direcdy th~ IAn i MWel' your Sj)l'Cific questions. 

Thanks 

Bill Blanton 

From: Blanton, ~I 

Sent: Ftl1ay, December 02, 201112:42 PM 
50 


509am021.eps

To: 'Dwayne BolJrqeas' 

Subject: RE: FoIow-up 

SOrry for the delay. I wimt to let you ~ meaningful response to your quertion; ho_. ~~ you till1 

imasine ~ ire 5trUUUng w~h how much det~il ~ can get into witnout gettilll md of the ofIid~1 

publit rele~se date. At thi~ point, we ire probably only days from issuing the draft dorome<lt for public 

review. Ora Ihat is dooe, ~ tin be mucl1less sefl!.itive about disseminating some of tM proposed 

detals. I ho!>e it iso'Uoo much oli problem if I ddor ~ few more day! before re\ponding. ThaI way I 

tin sequence Ihing! more properly ilnd not have 10 worry about lhe level of deta~ lhe lUI" were Ilo!lilll 

to share with you. 

ei~ 81~nlon 

From: Owayne Bourgeoi; [mailtojDwaydok!dd com! 

sent: Tuesday, November 29, 201111:10AM 

To: Blanton, Bill 

Subject: RE: FoIow-up 

HeIIoei~, 

I hope. that you r..d a great ~nksgMng. 

I was wondering d you had gonen iIIlything b~ from the 'Coutal Guys" as rne<1tioned? 

Dwayne 8oIIrgeois 

From; Bianton,lWI [mailto;BilI,Blaotoo@fema.dbs,oov! 

Sent: Thursday, November 10. 201 1 5:59 AM 

To: Dwayne BolJrgeois 

Cc; Wright, Roy lRoy.E.Wriabt@dhs.QOy\ 

Subject: RE: FoIcw-up 

I nave asked the coastal guys to wnte me up a qUick paragraph to answer your question on the 

coastal levees, I am waiting to hear back from them. 

From a lcocalleve!, ....nat we real ly need folks to do is to consider the draft approach once illS 

released and give us your comments. I am sure you are prepared to assisl in that wi¥f. and that 

is I'It1at is going 10 be extremely valuable to us in meeting the needs orthe nation in hazard 

ldenlifK:ation. 
51 


509am022.eps

Ihanlls 

8111 

From: Dwayne Bo\JrgeoiS (roa;l!QjDwameB@nlddd,com] 

sent: Thursooy, November 03, 2011 8:41 AM 

To: SkJnton, 8m 

Ct: W~ht, Rc1t' (R!ri,E.Wriaht@dt§,CIOY) 

ubject: ~: FoIIow .... p 

Thanks for the update guys, 

Are t"-ere any particulars on your approach 10 Co.islil Levees that VOU can tell me? 

Als.o, please lei me know ill can help IoGAy in Jny w¥-!. We WMlt 10 be SlJre we !lave a good ooy in 10 

lhis. 

North l,)foorche levee District 

Dwayne Bourgeois 

~nt from mv iPhone 

On Nov3, 2011, 016:27 AM, "Sianton, Bin" <BiIl,Blanlon@!l..ma,dh5.go¥? wrole: 

Things are going well. As you can Imagine, we got lots 0( good inpul duiYIg the Community 

Rou:ldtable event, SIoce that time, we have been maklng some refinements to the draft 

proposal. rouIiog ~ for COOCIJITencl! with FEMA leaderstlp, and gelliog it ready for PU~k: 

(9';~, 

Ooce these steps are com~te, we wm be sc:heliJllng briefings at the congressiooall&'lel, Afte( 

incorporating any additionBl netessalY changes we wililhen be abre to reI!<Ise the draft 

proposal lor public revii;>N 

Something yoo may be intefested in k~, we were orllina!1y talking about providing a 30-

day publJc review period, As the result 01 some iritial congressional feedback, we are nC7N 

learing toward a 45-day public review period. 

Thai IS aU I know at the moment We are hopeful that we will be able to release the proposal for 

~ic review soon: however, there are still a coupe velY important steps we are conuniJng to 

work through as I mentioned above. 

8m 9anton 
52 


509am023.eps

From: 

Sent: 

To: 

Il@Ilofl&ain, 

15ther~ an\'lhir'll you lU'fS ~ tell me? Cool<! 'fOIl point me j~ the r1Iht direction to let WIlle S"'tuf 

Information? 

Anything would be lIpPreci~ted. 

Bert Rewd!;, 

North l&oordle t.eve.! Oi'ltrkl 

Dwayne Bourgeois 

Uecutive Director 

North l&oordle CoMeMlion, l~ 1Ind Drainage District 

621 Jadtsorl St. 

Suite'" 

Thibodaux, ~ 70301 

Phone: 985-537-2244 

Fill: 877-272-4021 

From: Dwayne BoofgeOis 

Sent: Thursday, Cktober 27, 201110:48 AM 

To: W~ht, Roy (Roy,E,WMb!@dhs.QO'{);Blantoo,BilI (bilJ,blantoo@dbs\lOY) 

Subject: Follow-up 

oGuVS, 

SeVer,,1 folks h"vt' a~ed me if we rowe I>e"rd anything further Ii~ our Roondtable meetin& bad< 

durillllihe en<! of July, We n.ad tlve initi ~ dirtribution of the comm nl~ collected, which was line; but, I 

haven't seen anythir'll in quite some time. 

Can VO\I give me i/n update on this? What is the status and whe<1 do \'011 expect ~ w~1 be oot for Public 

Comment, which I unde~land as the ne'-l step? 

Also, durin& the RoundtoJbje, tllefe was tonSklerabie information availabte hinting at the approach 

towards riverine flooding oIle'1ees; but, 00 information on tI1e approach for toaslallevees. Although, it 

WilS mi/o;Ie very d e ill thilt this WilS goillllio be del'eioped as well, 
53 


509am024.eps

Thank! <Ig~in II)( your effort on Ihis ~nd I rulile wh~1 ~ talk it iI. I If)' to elpl~in that 10 100ks; but, 

eve<yOne il lti lilooking II)( ~nswers. 

Belt Reg~rm, 

North lafourche l.ey~ Dislrict 

Dwayne Bourgeois 

Exec\jlive Directl)( 

North liIfourcheConSeMlion, 1_ and Dfa inage Diltrict 

627 liIckson St. 

SuiteA 

ThiLood.tuA, L> 70301 

Phone: 98S-531-2244 

Fa.: 877-27./-4021 
54 


509am025.eps

-_ --~ .. - January 10, 2012 

Mary Jo Mullffi 

FedcTal Emergtlley Management Agency 

U,S. Oepanmcnt ofH01neland Security 

SOOCSlreetSW 

WashingtOn, D.C. 20472 

RE: fEMA AnaI}'$Is and Mapping Procedures forNon-AccrtWled Levees 

Proposed Approach for Public Rcview 121912011 

Dear Ms, Mullen: 

BOIIIY JlIrioo. 

""""'" 

A3 stakeholders, governing ageocies, as ~ll as midents of SOIIth Louisiana, please actepl this 

Itner as /)\If official reqllCSllO be involved in the further devdopmetll of lhe revised policy for 

coastlIllevttS. We strO!Igly f«1 thaI the revised policy, while an impmvcment lljlOll the former 

"withoutlev«s" policy with rnarlr.ed improvemtnls for riverine issues, is neither fully developed 

nor fully applicable to our dynamic coastline and delta. We hereby request to be inl'OJI'ed with 

the muhi-disciplinary project IcamlO ineorporate our comments, existiog research, as ~n as 

historical daUlto ensure the new policy is reflectil'e of current and fUlwt conditions as we 

acknowledge that our landscape is unique and should be repre5l:nted and modeled aerordingly_ 

The members of Amcialion of Levee BoaIds of Louisiana fetl I'ery strongly thaI while riverine 

Jel'ee issue.! offer guidante there exists no proper and ooncise mechanism 10 guide coastal \tvee 

districts I!Ild sllkcholdm. This lock of completeness may cause undue expenses and wasted 

effort in d3ta collection required 10 properly evaluate I!Ild clarify a polity beneficial 10 all 

involved. 

In response to the Federal Emergency Managemetlt Agency's (FEMA's)"Analysis and Mapping 

Procedures for Non-Accredited Le\'ees issued 00 De<::ember 9. 2011. the foUov.ing oommenLS are 

hereby submitted io writing as well as online: 

1_ Co~t~~ : Sections 1.4 and 1.6 o{the: proposed approacb reference varimu 

\earns including the multidisciplinary pmjct1 team, Independent 

Sdenlific Body (158). CommWlity RoWldlllble. I!Ild the National 

Ioslitute of8uilding Sciences (NIBS). 

QUfStion: How do local stakeholders obtaio 1be resuJLS oflhe work of the: 

lllrious \earns refrned to in Sections 1.4 and 1.6 of the: proposed 

approach? 

PWlOl!ioo!lor; 4oIql7 . Boa lGqe. ~ 7<II04...m . UO La.I SIrOII . s.... IlOO, ~ T_ Nonb . B-.I\ooc<.t-IIOI_I 

(ru)~2-7lOI . FOl(W)142-94I1 . b!Ip~""",,iII:pIL "" 

.... 1iIl'>'I~~ 
55 


509am026.eps

2. CUltJI: Fi~ 4-2. 4-4,4~ IIld 4-8 depiCl' horizooIaI dashed ]joe. 

Qufttio.: What is the meaning of the horiZOlllal dashed line sho .. n in !be 

l'aliOUS figum in section 4 and how will its elevation be 

determined? 

J. Conltll: ~ proposed approach references datil collection, engineering 

documentation. as 1I't:l11IS other rost-incurring efforts lhal seem 10 

be W rtSp01ISibility of the local g<lvrnuntD15 10 provide 10 FEMA 

in suppon of the proposed policy revisions. 

Qantiea: Willlhen: be any IilllllCiaI assiSIIIIItC 10 !he communities in 

providing the required data 10 fE."1A? 

Quftlion: Will an opportunity exi51 for actual participation from \ocal 

stakeholden 10 explain or Ie\;ew <!ala ccllcction? 

•• Contul: Proposed approtCh references changes 10 insuflI)Ct rates, ~Iing 

proccdurtS, intmctioo betwa:n FEMA and local sakebolden . 

.mong o<hef cost~hanging affects. 

QUHIKJO I: Has FEMA complettd III Ecooomic lmp;tcl Study "fthe proposed 

change: in policy? 

Qunli(lD 2: If IlOI, .... ;11 ODe be completed and if so, .. bat iJIbe uptt\(d 

timet'rame? 

,. Contul: Much emphasis is placed in westablishment ofD·ZontS located 

behind non-Kcrtdiled levees throughoullhc proposed approach. 

Question I: How 00 the ill5W8llCe rates rompart in I 0 zone vmus a str\ICtUfe 

built one (I) fOOl above ihc required BFE in III AlAE zone? 

Quntion 2: Could IIllCluai examJ* be provided? 

Q1It'IIioa 3: An FDIC lending insmutions rtquired unckr sepamt Federal 

mandates to havt tbtir mortgages in 0 zones carry nood 

insUl'lllCe? 

Question 4: What is the basis or procedurt for setting lilt ill$Urantt rates in the 

o Zcnes? 

Quu tion 5: What determilltS the inshore limit oflhc 0 Zone, i.e., as depicted 

in figurt 4·2? 

,. Contul: Seaion 3.2 beginning 011 ~ 3·3 stales., lffEMA determiDeS 

that I Slrutlurt i$1IDI • kv« ~ig;nal for IIood coDuoIl::ased OIl 

the regulalory delinitions ... lhen the analysis procttds 10 Figllft 3· 

1... 

QUHlio n I: Why wouldn 't t~ local stakeholders and government agencies: be 

involved before the SUllCtures wrrt designated by FEMA? 

QUHlioo2: Would it be possible to petfonn preliminary modeling r 

mming willl $lakeboldm and local officials? 

·2· 
56 


509am027.eps

7. Coatrn The proposed IppIOICh drtails the mctting proctSS ill SttIioo 3.7.4 

and ~ 18 01\ pqe 3·7 ~ H respenil'tly. 

Question I: How "illlhe FEMA established I.ocaI Levtt Wcrli~ Group 

(U WG) fllllCtion • IS a body Of as individual memben1 

Question 2: Will FEMA provide any funding for the II WO to fimctiOll? 

•• Contnt: Section 3.9 on pagtS 3·9 and 3·10 deiails mapping procedures and 

deteoniningll'lches. 

QurJlioD I: How mIlCh will the rommunitit$ be inwlvtd in the de(:isions 

rqarding .... tich method(s) .... ill be most appropriate forthe 

paiticut.levct roches in que:sti001 

QlIHlion 2: Will fEMA solely sclccl the proctdures to be: used lIId rondlX:! tbt 

anaIysi$. 15 implied in Sectiool9? 

Question 3: Will il be dtcidcd with staktholdtr 01 ",i!h stakelloldm 

OOIlCu~nce .... hich type of mapping procedure lI'ili be used \lith 

tach segment? 

Queltion 4: Would i1 be po5Siblc 10 see more criteria of what constitutes a 

qmenl and \01Iy? Specifically fOJcoastaIlevm. 

•• COllltlt: The Notiet ill the FtdmI Register, FEMA 's "l:bsitc and the 

FEMA New It"o-= ApproKh ill i)eo.'tlopmem!'Jrnphlet 

(l2I19f2i)11) indicalr the a\'ai abl~ly ofthrtc IlIlblil: OII·line 

forums to address the proposed changes. The fEMA wt'bsile and 

Pamphlet goes on 10 indicate thal1he webilWll ... ill be used 10 

"~senl the approach and aJlS',\"(I" 1liiy clarifying questiOlU". 

Ou« lioo I: When will thtJc questions be answtred? 

QUHtion 2: How will \be answtn be published? 

". Coalnl: Scdion UJ.2 (page 4-9) rtfettnteS FICICf of Saf~I)'. 

QursliGlIl: Til which physical pII1IIlCICJS should \be Factor ofSaftty refrned 

be applied? 

QUf$lio n2: Do \be parameters illClude still "'Oller level, \lOlve bcightl!lld run· 

up, and overtopping mtes? 

II. COllttll: Ed ofthc S JUggested approaches an: delineated fairly dea/ly in 

section 3 JIld 4, bowe'o'(f mostly fOf riverine flooding. Coastal 

Ievm art Ji'o'tll small paragraphs of explwtioo 

QursliGa: WilllllOff (\Nil on how D:lII$IaI OoodiJlj is l!IOddedIIaymd be 

,,'lilablt for 1t'\1tw prior to flll3Jizing \be suggested approach IIId 

guidance? 

... 
57 


509am028.eps

It 

13. 

14. 

" 

CODlut: 

Qutslion: 

ConlUI: 

Qun liOD: 

Coatnl: 

QUHtilm: 

Conllll: 

Former DFIRM genmtiOli involnd. $Ubsllntial amount of 

'"engineeringjllliglllcrll" as depic1ed in AppmIiI D of FEW." 

GllidtlillU INIIi Sp«jfialrions for Flood Hazard Mappill8 

PIJI1f1frJ. 

'Nhallevcl of engineering judgment on behalf of FEMA's mapping 

p.umen lIil! be used? 

Proposed Approath repeatedly mentiOllS engineering documents 

that "ill netd to be submitted by Ioc&I oflki&ls prior 10 

~l of revised modeling efforts. 

Wbett can • tcmplalt of informatioo rtquiztd be located? 

"FEMA must dtlennine ... 'hether lbe identified stru:t= is l!el'« 

and if it is designed fOf Rood control (S«tion 3.2, page 3·1)." 

Why wouldn\ this llediscusscd and deeided ",ilh the stakeholders 

(andfor LL WO) and be based on historical evidence, SlruClura! 

stability, etc? 

"The initial k't~ SIilihI:llder coon!ination and dau coIlectioo 

51eps ",ill be required for all non-accrtdited le'o'ct systems. In ~ 

instanm, \be resuJa of these 51tpS. .. do not lletmiute further 

discussion ... (Section 3.7. page 3-S)" 

Question I: AI. point is this decided? 

Qutstion 2: \\'00 makes the liMI determination? 

16. COnlt,t: On page vii of !he Public Review DoclJlllmts it staleS: "Once all 

to!JlIJJeIIts 1ft eonsidcml and the projXlSN lIIIIy$is and mapping 

apprOICb S\IIIUI\aI'ized in this public review document is Itfined 

basalODlhe a)I!I!DeDl$, FEMA lIil1 issueguidancc for the FEMA 

Regional Offices MId Slalt and local mapping partncn 10 

implemmt the proposed ~vee analysis .nd mapping approach and 

proccdurtS"~ 

QUWion I: Is tbere an eslimatoo time frame for FEMA 10 '"issue the: 

guidance"'? 

Qun tion 2: Gh"en me rumnt unkno .... 1\Il in me lIIOOunl of and oomplexi1y of 

making thangcs lUQCiated .... ith cornmenlS m:tiv~ .... ill FEMA 

issue 10 estimated d3tt !hal guidarJtt .... iIl bt issued 1I some 

reasonable time after !be dose of 1he romment period? 

.,. 
58 


509am029.eps

". Cooled: In the Public Re"iew OocwnenL. .. 

Comment: II appears that in el't1')' instance, consideration of the treatment of 

Coastal Levees i~ subordinate to the process or methods 10 be u§ed 

for ril'mne le"ee5. In tach ease, broad and explicit details m 

giYell for Riverine Levees I Systems and Coastal wees are 

addressed in a couple of parngraphs follo\\ing. 11 looks as if FEMA 

has addressed Coastal Le\'etS in the ronnat "and by the way, for 

Coastal Levees you can do this ... n This [onnat yields liole 

confidence that FEMA truly und~rstands and has considered the 

lllIique flooding pamnelef'S of Coastal Levees lIS compared 10 

Riverine Levees. This is espedally true when the Coastalltvees 

are located within a larger delta region. 

Question I: Can FEMA further demonstrate how these approaches will apply 

10 Coastal Ltvees? 

C,Jueslioo 2: Can the guidance ultimately issued fot Coastal Levees be 

indepencknl and flOt reflected as a sub-set of riverine levees 

techniques? 

18. Contu!: Much orthis new process hinges upon a very good understanding 

of the implications on receiving a Zone D designation. [n the 

Public Review Document section 4.3.4.3, second paragraph, 

second semence .. 

QuestiOB I: 11 states: ~Fof [}OJ1-FfRM SlnJclures, lilt fmesfor Zo/lf DOff 

similor (5imilu bow? Structure? Rate?) lo Ilrasefor Zone AE if 

lilt SII1lt:IUre·s IQw~slf100r (wbich 51ructurt? The Zone A[ on~ 

or the TAM D nne?) isal lilt BFE, but significol1llymort 

exptll!live than a Zone AE rOle[or s/1l4clWts(again, whicb 

S1 ructure? The Zone AE noe or Tb e Zone D noe?) eltvoled J 

fOOl or more above tht 8F£. ,. 

Questinn 2: Is it possible 10 gi l·c a dear set of examples !hat compare the cost 

of flood insU/1lllCc for the various SFIIA Zones and Zone D for 

given circwnstanccs. 

I •. Contu!: In the Struc1ural-Based Inundation ProcedUit in s«!ion 4.2.4 (pg 

4-13 ), there are no special considerations listed for Coastal Levees 

as compared 10 details prol·ided for Riverine Lewes. There are 

obvious and profound differenccs in how and when breaches migllt 

dew[op and in bow [QIIg the breach mightl100d the landward side 

in Coastal Lewes as compared to Riverine Levees. 

Questinn 1: Does FEMA not intend to use this melllod for Coasta[ LeI'eeS? 

Question 2: In the Sensitivity Ana[ysis section on pg 4-[ 6, what is the point of 

varying tile breach width and initiation time if tile final 

parameters chosen win maximize the flood hazard area." as stated? 

Intent is W1C[ear . 

. , . 
59 


509am030.eps

We would like (0 set up a stak~holdcr nll'Cling LO provide a<uhtiooal input at )'Our earliest 

conl'C"fIiCflCe pcr (/tc reasons statOO above. Pka~c conlllC( NicolcClltfonh. Shaw Environmcrual 

& In[rastnJctUR:. Inc" 81(225) 302·328] or Nioolc·cutfortMi'shawwp.(om. 

Sinccroly. 

John MolUOO 

Oier. Flood Protection Division 

CPRA 

Stel'C Wilson 

President 

Association of Lel'ee Boards of Louisiana 

And President. Ponlchanl1lin Levee DistriCl 

CharlOl1c Rrutdo lph 

Parish President 

ufourchc Parish 

Dwa)'ne Bourgeois 

boculil'c DirttLOr 

North Lafourche Conservation. lc>'tI:. 

~nd Drainage Di~lriCl 

rll~ 

Dr. Joseph Suhayda 

Coastal Oceaoograph("f 
60 


509am031.eps

Michel Claudet 

Vllish Presid(tl\ 

TCI'll'bonne Parish 

f&.~rJ;, I'Iruh PI!Sidmt 

51. MuyPWh 

Wirdell CIIroIe 

E.uartivt DiI!cIor 

South lafOUldle l.n'CC Dim:1 

0:: Bill BJaaloa, fEMA 

RoyWrighl, FEMA 
61 


509am032.eps

INFO RELEASE For )mroe61.te releise: 

6:00 PM 2/16/2011 

( oaslallevee ISSIm \¥lIn FEMA Proposed Revised Policy 

To: US Senator Olvki Vi tt~ MId US s.eoator Mory Lalldrie\< 

US Corer""""" .Ito. ... 5c;!lfw. US Cnngr ... m.., Sill c-idy, US (ongf""m.., j"ft landry & 

us COIlgr ... ",.n ChorW< 800t<tOflY, Jr .• 1Id 

WMm~ ~ mav intef"", 

A> manv 01 VOU .,,, awar". DIll local FEMA '",1thwt Jtvl!e\' ,.".cy RoW"", Work Groop h., 

!)fen trad:fng the development .nd eventu31 '~f;»e 01 FEMA's "Analy1ls arid Mappirlll'fD<@dtlre5for 

""' ..... Au'edrted ~. The rnultif\l! FEMA ProPDSe'd 110>1110.<11 dorumonl "'., rel".!e!lI", Publ", 

COmment "" Oe<.embef g. lOll. loaIty, the lOlJ~"' c.wtal Proled"" .nd ~l!:Itoratl"" NrttKrl\y, 

thO.''''''BtiOO oIle'ml! IIrnlfd, '" looi,jofla, Tho! P.ri'>Ms alLa/amm., T f"eboMUod 5t MIry, tIN! 

~h .nd Soutt. lafoUfCh" I,..- Dls\rictS and Or. )Qo;rv/l Suhoyd,o, N~ AngeletU, Ind Nicole CUtlorth 

wurici'18 with th" Shaw '"vi''''''' .... ,.1 ""d InlrmJlldu,,, G<oop wbm/tled joOnt <00)0,..,,1, cor=rninl: 

w drift doc\jment r.Io.<ied by HMA. 

ManYoJ 011( commm. cenl.,,,d on IIIe tad af dnMI in tho «IMider",1on of non~~.d 

roa,~~. 11' ... doc:u~ .... , ,,, ....... bIy d" t.nedwhen il ",me ta rtv.,;"e~, but n ... , m)' 

~ght on 'll'Mific. for I .... procn ... , that wuld be "...d fa .,,;aIV1'''', 0"' ,0a I.I~. SpKlfi<allv. ~ 

dO"''''' .. 111 wO'; lad:i", due ,,,,,,,icler.tim to th. comid...able diff ... ",,(~ in Iloodi"S .,,'"'''' 10( 1lIa.l.1 

illllmpiued 10 ,lYeo1ne le~. 

lull Illh. documenl (O(JI(I1enl period WI. dosing. WI! .eceived ~e 10"8 <II1lidpated 

In/omIiIIon tI\.ll we hid frqu~led "om ff.f>IA., \his Irri"o,tna!ion was COIKP!f'*'c I\OW t/IfI! propowd 

!dlPli~15 might 8~ due COIIsidemklo 10 the Imp~ of nO!Hwedited te>'ftlln =I~ ifU,. In ~. 

theymnduded two bMicpoPn\JI: 

1) Some of I""," l.,rnniques t/IPy had de<ieloped ... ".M (101 be app<opriil .. IOIia.ge ", .. tal 

~ '\'$ll'ffIl e5pedally, mg ~ Itv=. OIlier meiloWi oI.,,~. WOUld h.~ 10 be ".ed lor 

,urn '\'$1""". 

2) Akl>oul~ ""~ ol!/le PI" .... t glIId""'" ..... .00.. prOl:",. Ihev did ~;le!/le inadequacy oj 

tbeir current l--dlmE"O~nil Wave Height An.ll'$il for Fklod in';urif>(e 51ud ie5 (WHAFISI model 

'" otCU.ately representinS ~P>d dU';fIIl a hu,.tcane, 15petiall-j 10( Ui!"ller:tl Ie'" of rr;1e510f"C I, 

WI! hive in 00' tlelliic regklo. 

Thl, Information Wal ronflrmat>on of tilt problem, we law In both ~ current .nd propos.ed 

IHOI:~'" .egardine c,,",~J 1 .......... lIowever". we did not = Oow fEMA would be .ble 10 ifNI ""r toillal 

IeVUS under lheir wrrent POlicy reiisioo. In O(6er to bene! under5lilnd 111 01 this HMA offered 10 IIoIt 

a ect>n~ meeting. 

On the 9" 01 el1r u~. ~I 8iar11OO, St~fI ~oone"V ~ !.iiuma.k Ellinchiry of FOM. .lOnJI wJtil 

Marl! OIle' ,""d'.leIBaker, IfIC) Io"ld Jim Murph, (URS, Colli) repfftentlr\c fEMA, met with Jolin Momoo 
62 


509am033.eps

ICPRA), Dr. J=ph Sullayd~, Windell CtJrole, lil lie Pellegrini (urole and Dwayne Bourgeois in 

Washington, O.t. 

In thi' meeting, fEMA', ~essed recogn~ion that there is no 'one size f~s i ll solution' when ~ 

(omes to ell3luating the level of risk reduction that non-iWed~ed levees provide to communities gave 

uS confidenc:e that, in the end, aod working together, we un aod will produce OflRMS that most 

accurnetv represent the risk of Hooding in OI!r coastal area. We offered to wm with tllem on this 

change in their process w~1lout reservation. 

The m()5t import points that OUr group took ¥Nirof from tile meeting are as follows. 

11 When it comes to produdna mOfe accurite OFIRMS, no methods of ana~s are 'off tile 

tabJe' as j", as fEMA is ,0I>CfflIed. 

21 Th" P''''-'''' i> nu l ~uiltt; lu t.. Of.d III wI,l" 4"1 11IItt; ..... n", P''''"'''' i> IIUW 'i"I~"lior .. lI, 

,ra{ in order to ~lIow the utmost flexibility in p<oducing ~rate eilJ~s. 

31 Where in the ~t, when trvina to won: with FEMA, we encount ... ed a .... ies of wei intendina 

people whose haods were 'tied' by existing regulations; we wi. now be ible to meet with FEMA 

personnel who are no long ... encumbered. 

4] We can hope to see reJeas.e.:l (OiSullevee ,uidance iodependent of riverine ,uidance to 

draw a dun distinction in the differl!f\Cf"S to bette< assist FfMA maW'ng ~rtners in haodling 

Coastal Levees. 

SI We will all get a better undentaoding of Ihe U~ aod imp;lct of 0 zones. 

Overall, it was believed by all to be a very p<oductive meeting. Yet we have a 10", way to 10. 

CtJrrently, fEMA could not off", any time frame within wNciI the'/ would ~ the final 

ver$lOll of the change in poIky. FEMA ,bted that the time frame w~s dependent 011 their reaction to the 

(omments received aod their actions taken as a resuk of tile comments. further, it was uncJear flow tile 

important issue of tile coastal flooding SOIJrCfS leg, WIiA.FIS], not Qlrrently part of tile revision p<ocess 

WOlIld be ultimately resotved. 

OIIr Local fEMA 'w~hout levees' PoI;;y Revision Work Group asks OOJ Legislative Delegation to 

(Olltinue to follow this issue dosely aod iSSure that fEMA uses our unique coastal experti~ in furtller 

development of their re';s.I!d policy as ~ im~s coastal Je_ s)'Stems. 

Pre~red by Dwayne Bourgeois, North yfourclle Levee District Executive Director 
63 

PREPARED STATEMENT OF DAVID A. SAMPSON 

PRESIDENT AND CHIEF EXECUTIVE OFFICER, PROPERTY AND CASUALTY INSURERS

ASSOCIATION OF AMERICA

MAY 9, 2012 

Executive Summary 

Good morning Mr. Chairman, Members of the Subcommittee. My name is David 

Sampson and I am President and Chief Executive Officer of the Property Casualty 

Insurers Association of America (PCI). 

PCI and our members believe that the National Flood Insurance Program (NFIP) 

is vitally important to our Nation and the economy, and we are here today to support your efforts to pass bipartisan legislation in the Senate that includes a longterm reauthorization and meaningful reforms. 

PCI represents the broadest cross-section of insurers of any national trade association. Our more than 1,000 member companies write approximately 38 percent of 

all home, auto, and business insurance in the country. PCI members write about 

52 percent of all the flood insurance as partners with the NFIP through the WriteYour-Own (WYO) program. PCI also chairs the WYO Flood Insurance Coalition, a 

group that includes the more than 85 private insurers that actively participate in 

the WYO Program as well as all the other national property casualty trade associations. Thank you for the opportunity to appear before you today on behalf of PCI 

and its members. 

PCI commends you for holding this important hearing. The NFIP is set to expire 

on May 31—the day before the official start to the Atlantic hurricane season—if 

Congress does not act. More than 5.6 million American homeowners, renters, and 

businesses are NFIP policyholders and rely on this program to protect their homes 

and their financial security. They are depending on you to act quickly to avoid another lapse in flood insurance coverage. In addition, the millions of Americans who 

intend to purchase or refinance homes with financing from federally regulated lenders will not be able to do so if they live in a flood plain and Congress fails to extend 

the NFIP. Finally, the U.S. Government, and ultimately taxpayers, will be forced 

to pay the tab for the next flood if consumers are unable to purchase insurance due 

to an expired NFIP. 

The NFIP is also deeply in debt and needs long-term structural fiscal reform. If a private insurance company held no surplus and carried $17.75 billion in debt (on 

$4 billion in revenue) for 6 years, State regulators would immediately shut it down 

and the CEO would be fired. And yet the NFIP is both statutorily unable to charge 

adequate rates and often unwilling to raise prices by even the amount they are allowed, despite their massive accumulated debt. 

Two PCI studies on flood risk pricing revealed that the NFIP is providing Government subsidized flood policies at roughly one-third the private sector comparable 

premium. A RAND study estimated that FEMA is underpricing policies by 20 to 50 

percent, and even the Congressional Budget Office estimates that the NFIP’s builtin deficit is at least $1.3 billion annually, with the Government Accountability Office 

(GAO) suggesting the true program subsidy is far higher. The subsidies for repetitive loss and high flood-risk properties are even greater, estimated by GAO at 40 

to 45 percent of Government risk costs, with such explicitly subsidized policies actually growing in number and now representing over 22 percent of all Federal flood 

policies. The NFIP is fiscally unsustainable in its current path and must be reformed. 

NFIP Reauthorization 

The NFIP Should Be Reauthorized on a Long-Term Basis (e.g., 5 Years) 

Congressional authorization for the NFIP program has been extended on a shortterm basis 12 times since September 30, 2008, with the flood program scheduled to 

expire again on May 31, 2012. A long-term reauthorization will ensure that there 

will be no gaps in coverage, which occurred four times in 2010 alone, each lapse 

longer than the previous with increasing uncertainty and frustration among consumers and providers. 

Gaps in flood insurance coverage cause significant disruption in the housing markets. Homebuyers in flood zones with a federally backed mortgage are required to 

purchase flood coverage before the property can be closed on. According to the National Association of REALTORS, in 2010, more than 40,000 real estate transactions 

were delayed because of lapses in the NFIP’s authorization. 

Gaps also cause policyholders and insurers to doubt the continued availability of 

the product. Each time the program lapses, or is extended for a short term, a cumbersome and expensive series of special bridging transactions is required. Insurers, 

64 

consumers, and the NFIP must set aside policy purchases, collect funds and advance 

claims payments. This creates significant costs and bureaucracy for the marketplace 

and uncertainty for Americans who rely on this important protection. This uncertainty has been one of the reasons that several Write-Your-Own carriers have exited 

the program. 

With the next NFIP expiration deadline scheduled for the day before the upcoming hurricane season, Congress and consumers face a potential economic nightmare 

in both public and private markets if a major storm occurs during a lapse—something that is so easily preventable. 

First and foremost to protect Americans and our economy, a long-term reauthorization of the national flood program is needed. 

Reforms 

Fixing the Rate Structure 

The NFIP heavily subsidizes consumer rates across the board, unlike rates 

charged in the private sector. High flood-risk properties are particularly and explicitly subsidized, as part of a grandfather clause established at the NFIP’s inception 

in 1968 that was expected to shrink over time but has instead morphed into an 

ever-growing subsidy. Even while carrying tens of billions of dollars in ongoing debt, 

the NFIP has allowed these subsidies to grow in recent years as it has struggled 

to impose updated flood maps. Rate increases during that time have been minimal 

despite increasing predictions of storm loss by catastrophe modelers. While WriteYour-Own carriers have little direct interest in the NFIP’s rates, as taxpayers who 

help facilitate the program, we encourage Congress to consider phasing out NFIP 

subsidies over time. Government insurance subsidies can create a moral hazard by 

encouraging overbuilding and discouraging consumer risk mitigation. This results in 

greater ultimate costs to taxpayers. 

The long-term NFIP reauthorization bill passed by the Senate Banking Committee last year includes reforms raising from 10 to 15 percent the ceiling for annual rate increases that the NFIP can establish. Insurers believe that insurance 

premiums should reflect the risk of loss, and we support this initial improvement. 

The bill also increases the minimum deductibles for flood losses to reduce program 

costs and more appropriately reflect prevailing practices in the private insurance 

market. Increasing the loss deductible should also improve the NFIP’s solvency and 

allow more resources to be reallocated towards loss mitigation and protecting consumers from financial ruin. PCI also supports congressional proposals to establish 

an NFIP reserve fund, setting aside a percentage of the potential loss exposure. This 

would better protect consumers and taxpayers, though it would still be a fraction 

of the surplus that would be required for private insurers. 

Increasing the rates is the first step, but the program must also begin to further 

offset the significant Government subsidy (which FEMA states is 40–45 percent for 

pre-FIRM properties). The rates need to be closer to true market rates before any 

meaningful discussion related to the private industry taking on flood risk can take 

place. PCI estimates that flood insurance premiums would need to double, and in 

some cases triple, if the private insurance market were to write this business on 

a primary basis. Proposals to end the NFIP’s primary flood underwriting are unrealistic given the current steep subsidies and the recognized unwillingness of many 

homeowners to purchase coverage in high risk areas and at highly subsidized rates, 

even when mandated. 

Address Mapping Issues 

The certification of levees and ongoing flood map modernization has continued to 

be controversial, particularly for consumers who are now required to purchase flood 

insurance, often at higher-than-average Federal rates, as a result of map revisions. 

While PCI believes that insurance rates should always appropriately reflect the cost 

of risk, a phase-in for these purchasers as well as the reestablishment of the Technical Mapping Advisory Council are important measures to ameliorate the impact 

of these changes for consumers, communities, the States and policyholders. PCI and 

members of the Write-Your-Own coalition would ask that our industry be represented on that Council by a representative of a flood insurance servicing carrier 

(a ‘‘Write-Your-Own’’ company). 

PCI encourages the extension of the Flood Insurance Reform Act of 2004 program 

for Severe Repetitive Loss Properties. These properties account for just 1 percent 

of NFIP’s insured properties but are responsible for 25 to 30 percent of claims. It 

is time to buy-out, or otherwise charge the appropriate premium for these properties 

that continually flood and are rebuilt time after time. 

PCI also supports the inclusion of nationally recognized building codes in the 

floodplain management criteria. This would require FEMA/NFIP to work with the 

65 

building code councils to include this information. It would provide for better construction of properties and help minimize damage from a variety of perils, including 

flood, as well as reduce the number of repetitive loss properties over time. 

Address Servicing Issues 

The ‘‘Write-Your-Own’’ (WYO) program, established in 1984, has been very successful in increasing consumer participation in the NFIP, but it has also been the 

subject of legislative discussion over the past few years. There have been issues related to loss settlement, expense reimbursement, and participation in the NFIP by 

WYO insurers. 

Following Hurricane Katrina, there were significant issues related to the settlement of wind and water losses. Most of these issues would have been addressed by 

the application of the NFIP appeals process that was included in the Flood Insurance Reform Act of 2004. Unfortunately, that process was not implemented when 

Katrina hit, but it is in place now. Thus, the rare occurrences of wind-water disputes are already effectively dealt with by existing reforms and no new reporting 

requirements (such as providing the NFIP with wind claims information) or other 

legislation is needed to address these issues. 

Questions sometimes also arise about the WYO claims expense reimbursement for 

insurers. Following Katrina, the NFIP worked with the WYO participating insurers 

to revise the claims expense reimbursement when significant catastrophes occur. Indeed, the NFIP reduced the amount of the claims expense reimbursement where the 

number of losses are significant and insurers and the NFIP can benefit from some 

economies of scale. However, the marketplace has now proven that existing claims 

reimbursement payments are not overly generous. If they were, the number of insurers willing to participate in the WYO program would not have continued to decline. Thus, to the extent any further changes are proposed, we urge careful consideration of the potential effect on WYO participation. 

Eliminate Outdated Commissions 

Past Senate bills have included provisions establishing a natural catastrophe commission to examine insurance market conditions following the 2005 hurricanes. PCI 

suggests that the marketplace, its regulation, and the sophistication of catastrophe 

modeling have advanced significantly over the past 7 years, eliminating the need 

for such a commission. 

Conclusion 

A long-term extension of the flood program with fiscal rate reforms is supported 

by consumers, insurers, environmental groups, taxpayer groups, the real estate industry, and the overwhelming majority of both parties in Congress. At a time when 

the American economy is struggling to move forward, housing values are still mired 

in recession, and hurricane season is rapidly approaching, a fiscally sound long-term 

reauthorization of the NFIP is absolutely critical before another lapse occurs. 

PCI applauds your efforts to encourage the Senate to take up this issue and to 

pass a long-term reauthorization and reform bill before May 31. PCI stands ready 

to be of any assistance in this effort. 

Thank you. 

PREPARED STATEMENT OF JON JENSEN 

GOVERNMENT AFFAIRS COMMITTEE CHAIRMAN, INDEPENDENT INSURANCE AGENTS

AND BROKERS OF AMERICA, AND PRESIDENT, CORRELL INSURANCE GROUP

MAY 9, 2012 

Good afternoon Chairman Tester, Ranking Member Vitter, and Members of the 

Subcommittee. My name is Jon Jensen, and I am pleased to be here today on behalf 

of the Independent Insurance Agents and Brokers of America (IIABA or Big ‘‘I’’) to 

present our association’s perspective on efforts to reform the National Flood Insurance Program (NFIP). I am president of Correll Insurance Group, an insurance 

agency based in South Carolina with 12 offices and 132 associates. Since 2011 I 

have served as Chairman of the Government Affairs Committee for the Big ‘‘I’’. 

The Big ‘‘I’’ is the Nation’s oldest and largest trade association of independent insurance agents and brokers, and we represent a nationwide network of more than 

a quarter-of-a-million agents, brokers, and employees. IIABA represents independent insurance agents and brokers who present consumers with a choice of policy options from a variety of different insurance companies. These small, medium, 

and large businesses offer all lines of insurance—property/casualty, life, health, employee benefit plans, and retirement products. In fact, our members sell 80 percent 

66 

of the commercial property/casualty market. It is from this vantage point that we 

understand the capabilities and challenges of the insurance market when it comes 

to insuring against flood risks. 

Background 

The Big ‘‘I’’ believes that the NFIP provides a vital service to people and places 

that have been hit by a natural disaster. The private insurance industry has been, 

and continues to be, largely unable to underwrite flood insurance because of the catastrophic nature of these losses. Therefore, the NFIP is virtually the only way for 

people to protect against the loss of their home or business due to flood damage. 

Prior to the introduction of the program in 1968, the Federal Government spent increasing sums of money on disaster assistance to flood victims. Since then, the NFIP 

has saved disaster assistance money and provided a more reliable system of payments for people whose properties have suffered flood damage. It is also important 

to note that for almost two decades, up until the 2005 hurricane season, no taxpayer 

money had been used to support the NFIP; rather, the NFIP was able to support 

itself using the funds from the premiums it collected every year. 

Under the NFIP, independent agents play a vital role in the delivery of the product through the Write Your Own (WYO) system. Independent agents serve as the 

sales force of the NFIP and the conduits between the NFIP, the WYO companies, 

and consumers. This relationship provides independent agents with a unique perspective on the issues surrounding flood insurance, yet also makes the role of the 

insurance agent in the delivery process of flood insurance considerably more complex than that of many traditional property/casualty lines. Agents must possess a 

higher degree of training and expertise than their non-NFIP participating counterparts, which requires updating their continuing education credits through flood conferences and seminars. This is done regularly and involves traveling to different regions of the country, costing personal time and money. Every agent assumes these 

responsibilities voluntarily and does so as part of being a professional representative 

of the NFIP. 

Despite our strong support of the NFIP, we also recognize that the program is 

far from perfect, which was made all the more clear by the devastating 2005 hurricane season. The current $17.2 billion dollar debt, incurred in 2005, reveals some 

of the deficiencies of the program and has strained Government resources. While 

IIABA is confident that the NFIP will recover, it is important that Congress shore 

up the NFIP’s financial foundation and use this opportunity to enact needed reforms 

to ensure the long-term sustainability of the program. 

For this reason, the Big ‘‘I’’ strongly supports S. 1940, the ‘‘Flood Insurance Reform and Modernization Act of 2011,’’ by Chairman Tim Johnson, which the Senate 

Banking Committee reported out unanimously last year. The Big ‘‘I’’ thanks the 

Committee for its action on this legislation and urges the full Senate to consider 

the legislation on the floor at the earliest opportunity. 

The Big ‘‘I’’ also supports H.R. 1309, the ‘‘Flood Insurance Reform Act of 2011,’’ 

similar legislation which passed the House of Representatives with over 400 votes 

last year. We believe that while there are some differences between the Senate and 

House bills, these minor differences could be overcome by policy makers with a modest amount of effort. 

Long-Term Extension 

As you know, the NFIP is a Congressionally authorized program that requires 

periodic extensions. Traditionally these extensions have been for multiple years 

(often for 5-year periods) but in recent years Congress has not passed a long-term 

extension of the program and instead has opted to pass numerous short-term extensions. In 2010 alone the NFIP expired three separate occasions only to be retroactively extended by Congress each time. Each expiration of the program led to concrete damage to the real estate market and the country’s economy. During one 

month-long expiration in June 2010, for example, the National Association of Realtors estimated that as many as 50,000 new home loans were either significantly delayed or canceled. While the IIABA appreciates each of the retroactive extensions, 

we strongly believe that in order to provide certainty to the marketplace as well as 

avoid damage to our fragile economy, Congress should pass a long-term extension. 

Even the short-term extensions passed over the last several years, while thankfully staving off expiration of the program, caused their own economic damages. 

Every time the program is set to expire, WYO companies send notices to their consumers about the pending expiration, agents must then communicate to their clients 

about what the ramifications of an expiration would be (as well as oftentimes providing real time legislative updates on extension legislation), banks must prepare 

for how and if to enforce the mandatory purchase requirement of an expired proVerDate Nov 24 2008 11:15 Apr 25, 2013 Jkt 048080 PO 00000 Frm 00070 Fmt 6621 Sfmt 6621 L:\HEARINGS 2012\05-09 AM ZDISTILLER\50912AM.TXT JASON
67 

gram, and realtors and mortgage bankers must discuss with their customers how 

and if to proceed with home loan closings. While not nearly as damaging as an actual expiration, the uncertainty and the increased work-load caused by short-term 

extensions justifies a long-term extension of this critical program. 

It is for these reasons that IIABA strongly supports the 5-year extension found 

in the Senate reform bill. 

Moving Towards More Actuarial Prices 

The Big ‘‘I’’ has for many years asked Congress to explore phasing out subsidies 

in the NFIP altogether. We are pleased that the Senate legislation contains proposals to phase out subsidies for many properties. Almost 25 percent of property 

owners participating in the NFIP pay subsidized premium rates. These subsidies 

allow policyholders with structures that were built before floodplain management 

regulations were established in their communities to pay premiums that represent 

about 35 to 40 percent of the actual risk premium. The subsidized rates were deliberately created by Congress in 1968 in order to help property owners during the 

transition to full-risk rates. However, after 43 years the Big ‘‘I’’ believes it is time 

to start phasing out this significant subsidization. 

In addition to the fact that subsidized rates torpedo any hope that the NFIP could 

ever be actuarially sound, FEMA estimates that subsidized properties experience as 

much as five times more flood damage than structures that are charged full-risk 

rates. Customers that are paying a full actuarial rate have a vested interest to take 

measures to reduce the economic damages associated with floods. In contrast, those 

with subsidized rates have less incentive to mitigate. The Big ‘‘I’’ welcomes and supports the Senate legislation’s phasing out of subsidies for commercial buildings, second and vacation homes, homes experiencing significant damage or improvements, 

and repetitive loss properties. 

Finally, the Big ‘‘I’’ welcomes S. 1940’s proposal to increase the ‘‘elasticity band’’ 

with which FEMA can increase premiums in any given year. Currently the annual 

elasticity band for premium increases is a maximum of 10 percent on any property. 

S. 1940 would propose to increase this band to 15 percent which would allow the 

program to move even more properties towards actuarially priced rates. 

Privatization of the NFIP 

Some observers have argued that the program should be eliminated or completely 

privatized. These arguments center on the assumption that the private market 

could step in and offer flood insurance coverage. However, the IIABA has met with 

many insurance carriers who categorically state that the private market is simply 

unable to underwrite this inherently difficult catastrophic risk, especially in the 

most high risk zones where it is needed. IIABA would always prefer to utilize the 

private market, and our members would almost certainly prefer to work directly 

with private insurance carriers rather than a Government agency. However, where 

there is a failure in the marketplace, as there is in the case of flood insurance, we 

believe it is imperative that the Government step in to ensure that consumers have 

the protection they need. This was the reason the NFIP was first created in 1968, 

because the private market could not offer flood insurance and a series of high profile floods had consumers turning to direct Federal disaster assistance as their only 

recourse. We see no evidence that the private marketplace is any more prepared or 

capable of underwriting flood risk in 2011 than they were in 1968. 

We do not, however, oppose the study on private market capacity as called for in 

the Senate bill. We believe that this study will likely show that the private market 

cannot properly underwrite flood risks, but if it can be demonstrated that a private 

market could emerge in some way, we would welcome that discussion. 

Repetitive Loss Properties 

Repetitive loss properties—currently defined as those that have had two or more flood insurance claims payments of $1,000 or more over 10 years—continue to put 

a significant drain on NFIP resources. These properties account for about 1 percent 

of all policies but are estimated to account for up to 30 percent of all NFIP losses. 

The Big ‘‘I’’ is encouraged that the Senate legislation would phase out subsidized 

rates for these repetitive loss properties, and in the future would urge the Committee to consider taking further measures to combat this difficult issue. For example, if a repetitive loss property continues to experience a certain number of losses 

within a specific timeframe, Congress could require that property to either take 

stringent mitigation measures or to be disqualified from participating in the NFIP 

altogether. 

While Congress has previously made efforts to tackle the repetitive loss issue, according to GAO the number of repetitive loss properties has actually grown over the 

last decade. Dealing with repetitive loss properties is of the utmost importance not 

68 

only because of the financial strain that they place on the program, but also because 

of the obvious lack of fairness that these properties highlight to other program participants and the general public. 

May 31st Expiration 

As you know, the NFIP is set to once again expire on May 31, 2012, barring Congressional action. While some stakeholders believe that short-term extensions are 

helping to add a sense of urgency for the passage of the long-term reform and extension bills, the Big ‘‘I’’ is very concerned about the messages that these continual 

short-term extensions are sending to NFIP consumers, the WYO companies, and the 

agents that drive consumers to the program. 

While the most important message the Big ‘‘I’’ would like to share with this Subcommittee is to urge you to not allow the NFIP to expire, it is also important to 

reiterate the increasing frustration felt in the marketplace concerning the continual 

short-term extensions. The NFIP protects 5.6 million consumers across the country, 

and after 6 years of short-term extensions it deserves some long-term certainty. 

Conclusion 

The IIABA is very pleased that the Subcommittee is conducting today’s hearing 

on comprehensive flood insurance reform and we strongly urge the Senate to quickly 

consider the Flood Insurance Reform and Modernization Act so that work can start 

immediately on resolving differences between S. 1940 and H.R. 1309. Reforming and 

extending the NFIP is essential to ensure the long-term stability of the NFIP. It 

is our sincere hope that agreement can be reached soon on the reform and long-term 

extension legislation, but we also feel that the time is approaching to consider abandoning the chaotic practice of short-term extensions and to finally provide some stability for the program and the marketplace—regardless of the status of the reform 

bills. 

I thank the Committee for giving me the opportunity to express the views of the 

IIABA on this important program. I hope very much that this hearing will contribute to additional action taken by Congress to pass long-term flood insurance reforms and to ensure the stability of the NFIP. 

PREPARED STATEMENT OF MOE VEISSI 

2012 PRESIDENT, NATIONAL ASSOCIATION OF REALTORS

MAY 9, 2012 

Introduction 

Chairman Tester, Senator Vitter, and Members of the Economic Policy Subcommittee, the 1 million members of the National Association of REALTORS®

(NAR) thank you for this opportunity to testify on the urgent need for long-term 

reauthorization and reform of the National Flood Insurance Program (NFIP). 

My name is Moe Veissi, and I am NAR’s 2012 President. I have been a REALTOR® for over 40 years, and am the broker-owner of Veissi & Associates, Inc., in 

Miami, FL. Since 1981, I have served the REALTOR® community in many capacities, from local association president, to State association president, to Regional 

Vice-President, and now on the national stage as NAR President. Based on numerous first-hand accounts over the years, as well as my direct personal experience as 

a practitioner in the field, I can assure you that there are few issues of greater importance to real estate markets than ensuring access to affordable flood insurance. 

Thanks to your continued leadership, the Senate Banking, Housing, and Urban 

Affairs Committee has already taken a critical step toward providing that certainty, 

by unanimously approving the Flood Insurance Reform Act (S. 1940) last year. One 

of the most important next steps the Senate could take right now is to pass this 

bill and keep the legislative process moving forward. The House has already passed 

similar legislation (H.R. 1309) by an overwhelming margin (406–22). This is a level 

of bipartisan support few bills have received in any Congress, and it is testament 

to the careful and painstaking work by you and many other members over multiple 

sessions. The bill would not only reauthorized but reform and strengthen NFIP 

long-term, and we are confident that any remaining issues can be resolved through 

the amendment process on the floor. This bill is ready for Senate consideration. It 

is a bipartisan opportunity. It deserves a vote. 

As the Committee is well aware, for some time now, the NFIP has been operating 

under stopgap extensions of authority to issue flood insurance. The latest one is set 

to expire on May 31, 2012. There now have been a total of 17 extensions since 2008 

(appended); twice, failure to act on an extension resulted in a multiweek lapse of 

NFIP authority. According to NAR research, this stalled more than 1,300 home 

69 

1 NAR Statement to the U.S. Senate Committee on Banking, Housing, and Urban Affairs, regarding the hearing ‘‘Reauthorization of the National Flood Insurance Program,’’ June 9, 2011, 

pp. 9 and 20. 2 Id, pp. 4–5. 

sales per day during the 53-day lapse in 2010. Each sale meant jobs and growth 

to the U.S. economy. There were unquantified losses to property owners and taxpayers beyond homes sales—not to mention 17 missed opportunities for reforms 

which would help pay down the outstanding loan for Hurricane Katrina. A stopgap 

approach to NFIP reauthorization is not a responsible way to run a Federal program—let alone one upon which 5.6 million taxpayers in 21,000 communities depend. We urge the Senate to bring up and pass the Flood Insurance Reform Act, 

immediately. 

Background 

Floods are a national problem requiring a Federal solution. As detailed in our 

prior testimony before this Committee, there is not a single State in the Union that 

has escaped a presidential flood disaster declaration in the past two decades. 1 Since 

May 1, 2011, disasters have been declared in more than half the States, including 

Wyoming, New Mexico, Oklahoma, Utah, Nebraska, North and South Dakota, Iowa, 

Kansas, Ohio, and Missouri. Tomorrow, it could be Michigan or New York. Floods 

are inherently unpredictable. They can occur anywhere—along rivers, wherever 

snow melts or rain falls. We simply do not know when or where they will strike 

next. 

Because of their unpredictable nature and high cost, there has never been an adequate private market for flood insurance. The lack of predictability would force insurers to charge unaffordable rates that few States would be willing to approve. 2

Already, few property owners will buy flood insurance at the more affordable NFIP 

rates; short of imminent threat, most question the need. However, allowing the rate 

to rise to reflect this ‘‘adverse selection’’ (i.e., those most likely to buy are also most 

likely to flood) would guarantee that few could afford flood insurance in a purely 

private market. 

Given this, and the widespread devastation floods cause, the Federal Government 

will step in, one way or another. In the past, the Federal response took entirely the 

form of appropriated disaster relief where taxpayers were 100 percent ‘‘on the hook’’ 

for rebuilding flooded communities and properties. Then Hurricane Betsy struck in 

1965, and the Federal Government could no longer afford to ignore the cost to the 

Federal Government and taxpayers. A HUD commission, authorized by Congress 

and convened by President Johnson, had demonstrated how creation of a Federal 

insurance alternative could reduce the cost. Rather than relying on Government assistance after the fact, those at risk of flooding could assume a measure of responsibility and control upfront by purchasing federally backed insurance and essentially 

prepaying to cover future flood damage. Every insured property would mean one 

fewer to be rebuilt with taxpayer dollars. Insurance would pay for the damage, so 

taxpayers would not. The NFIP was the result in 1968. 

Since then, the NFIP has been reauthorized multiple times, but the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (P.L. 108-264) was the last 

reauthorization bill to become law. Congress returned to the subject last session, but 

the 110th Congress came closer to a subsequent reauthorization, when both houses 

passed similar versions of the Flood Insurance Reform Act, the predecessor to this 

Committee’s S. 1940. That bill passed the Senate by 92 votes and was headed to 

a conference with the House when attention turned to the U.S. financial crisis. S. 

1940 is virtually unchanged from what passed the Senate in 2008. And while there 

were not many bill differences to begin with, the House has since adopted many of 

the Senate provisions. Now 17 stopgaps and two shutdowns later, NFIP authority 

is again set to expire on May 31st of this year. 

Real Estate Markets Have NOT Rebounded 

The housing market continues to recover from one of the longest economic 

downturns since World War II. While fewer property owners are reporting as many 

major problems as they have in the past and some markets are even starting to 

trend upward, surveys show real estate prices remain weak as the distressed properties still make up a significant portion of home sales. Many home buyers, who 

bought during the peak of the market and saw their homes values drop precipitously, continue to be underwater and many of those face foreclosure. Below is 

NAR’s chart of existing home sales. 

70 

3 Id, p.4. 

Data show a concomitant drop in sales around the time of the last multiweek 

lapse. As the chart illustrates, sales were dropping before and during June 2010 but 

rebounding afterward. The lapse was not the only or even the driving factor for this, 

but as this suggests, it contributed. By Federal law, buyers and property owners 

may not obtain a federally related mortgage loan without flood insurance in 21,000 

communities, where there is a 100-year floodplain. These days, the bulk of financing 

is federally related, and private insurance is not an option, except for the highest 

value property owners. 3

Commercial real estate markets are similarly struggling. Property values have 

plummeted across the board since 2007. Small business owners—the engine of job 

creation and innovation and backbone of the local community—have suffered the 

most. Compounded with $2 trillion in commercial real estate loans coming due over 

the next decade and a limited capacity to refinance, sales and leasing of commercial 

properties have been dismal. The failure to reauthorize the NFIP has only exacerbated the situation for commercial property owners, who are already struggling to 

stay afloat amid the liquidity crisis, high vacancy rates, and lower net operating incomes. In many cases, this held up commercial sales, contributing to the economic 

instabilities. 

NFIP Stopgaps Exacerbate Market Uncertainty 

For some time now, the NFIP has operated under stopgap extensions of authority 

to issue flood insurance. Since 2008, there have been a total of 17 extensions, with 

the latest one set to expire on May 31, 2012. Twice in 2010, failure to act on an 

extension turned into a multiweek shutdown, resulting in the delay or cancellation 

of any property sale to be financed with a federally related mortgage in the 100- 

year floodplain. 

NAR surveyed its membership to assess the impact of the shutdown and found 

that the NFIP is essential for successfully completing half a million home sales annually. Further analysis confirmed that each day of a lapse stalls more than 40,000 

sales per month or 1,300 daily. Nationwide, about 8 percent, or 10 million homes, 


509am034.eps
71 

4 NAR estimated annual existing home sales by taking the 2008–2010 average. Using an average ensures that any year-to-year variability (such as the first-time home buyer credit) is 

smoothed out and avoids the elevated activity of the circa-2002 housing boom. The 2008–2010 

market activity has been generally consistent with the activity prior to the year 2000. Adding 

2011 data would not significantly change the results. 5 NAR estimated the percentage of the existing sales in SFHAs by using GIS software to overlay spatial layers of block-level data from the latest American Housing Survey (ACS 2005-2009) 

with the map of SFHAs from FEMA. 6 New residential sales data is available by region only. Assuming the new homes are similarly located in the SFHAs as the existing homes are, the share of homes located in the flood 

zone is multiplied by the total number of new sales by region. 

are located in the 100-year floodplain or Special Flood Hazard Areas (SFHAs). Table 

1 presents the daily impact in SFHAs by census region. 

Economic Impact of Home Sales 

A stopgap approach to NFIP reauthorization not only affects home sales but also 

has a ripple effect throughout the economy. Each sale provides jobs and income to 

real estate agents, construction workers, building contractors, mortgage service providers, home inspectors, home appraisers, and many others. There is an annual impact to the community as there is less income to spend on goods and services. 

NAR estimated the contribution of each home sale to Gross Domestic Product 

(GDP). In 2010, real estate and related industries added $58,000 in income per sale, 

accounting for the multiplier effect. Using a conservative earnings assumption, this 

translates into two jobs generated for each sale. 


509am035.eps
72 

Additional Economic Impacts 

Each NFIP lapse affects +1,300 home sales daily, each of which has the potential 

to generate jobs and contribute to the annual growth of the economy. But this home 

sales impact is not the full impact of a lapse. While NAR has quantified the loss 

of those sales with a federally related mortgage in the 100-year floodplain, as well 

as the multiplier effect, this does not account for: 

• Property Sales Other Than Single Family Homes and Rentals. The mandate to 

purchase flood insurance applies to multifamily and nonresidential properties, 

too. 

• Refinancing. During the lapse, Write Your Own companies (which partner with 

NFIP to process insurance policies) are unable to renew or modify a policy, either. Existing property owners could be in technical default of a mortgage for 

failure to renew flood insurance after the 30-day grace period. 

• Financing BEFORE Lapses. Some banks, when faced with the prospect, often 

weeks in advance, preemptively suspended lending in the floodplain. Federal 

regulators attempted to address this through guidance that loans could still be 

made where buyers took steps, though due to the lapse, were unable to obtain 

flood insurance; nevertheless, anecdotal reports were that most of these lenders 

did not find the guidance persuasive and instead, erred on the side of protecting 

their interest in the property, by choosing not to lend. 

• Insurance Outside of Federally Designated Floodplains. According to NFIP, 25 

percent of flood claims come from properties located outside of areas where flood 

insurance is required but where the owner chooses to purchase coverage. 

Finally, there is also the consequence to taxpayers. Again, a property without 

flood insurance is a property one flood away from Federal disaster relief—at taxpayer expense. Owners of a property facing a 1-percent chance of flooding in a given 

year (or a 26-percent chance over the life of a 30-year mortgage) would most likely 

turn to the Federal Government after flooding. Compared to the number of NFIP 

policies, the following table bounds the impact of uninsured residential structures 

for the United States. 


509am036.eps
73 

7 NAR estimated the percentage of these in SFHAs by using GIS software to overlay spatial 

layers of block-level data from the latest American Housing Survey (ACS 2005-2009) with the 

map of SFHAs from FEMA. 8The 5-year ACS offers a rolling average of housing units at the lowest geographic level available. NAR calculated the comparable 5-year average of NFIP policies, based on data provided 

by FEMA. 

Bipartisan Opportunity for NFIP Reform 

We appreciate NFIP’s many program innovations over the years, including employing advanced flood mapping technologies (e.g., satellite imaging and LIDAR), 

working to replace its ‘‘without levee’’ policy with a more precise approach, and instituting independent review of map appeals. While there have been many great 

strides, REALTORS® have helped identify a number of areas for further improvement, including: 

• Enhancing FEMA notifications and communications with communities. 

• Providing reimbursement of flood-map appeal expenses where NFIP erred. 

• Providing additional time for communities and homeowners to work through appeals. 

• Reviewing mapping standards and procedures, and streamlining the process. 

• Undertaking more accurate insurance pricing, particularly behind dams and 

levees to account for the protection provided by flood control structures. 

• Indexing and expanding coverage to include business interruption and living expenses. 

We applaud the Committee for addressing virtually every one of these recommendations in S. 1940. These reforms will greatly improve the accuracy of floodplain mapping and increase participation. They will help property owners better understand the flood risk and make more informed decisions that protect their homes 

and businesses as well as taxpayers. But unless the Senate takes up this bill and 

soon, the many years of hard work and collaboration on these reforms will be lost, 

and we will have to start again. We will not only have lost these important reforms 

but also missed yet another opportunity to fiscally strengthen the program for the 

long run. 

Conclusion 

Thank you again for the opportunity to share the REALTOR® community’s views 

on the NFIP and the urgent need for long-term reauthorization and reform. All stopgap extensions do is maintain an uncertain status quo while shut downs risk homes, 

businesses, communities, and the U.S. economy. NAR urges the Senate take up and 

pass the Flood Insurance Reform Act, immediately, and keep the legislative process 


509am037.eps
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moving forward. NAR stands ready to work with you and the Senate to pass meaningful reforms to the NFIP that help protect property owners and renters and help 

them prepare for and recover from future losses resulting from floods. 


509am038.eps
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1 Holland and Bruyere (2012). 

2 International Panel on Climate Change (2007). 

3Shepard, C., V.N. Agostini, B. Gilmer, T. Allen, J. Stone, W. Brooks, M W. Beck. 2011. ‘‘Assessing Future Risk: Quantifying the Effects of Sea Level Rise on Storm Surge Risk for the 

Southern Shores of Long Island, New York’’. Natural Hazards. DOI: 10.1007/s11069-011-0046- 

8. 

PREPARED STATEMENT OF SARAH MURDOCK 

SENIOR POLICY ADVISOR, THE NATURE CONSERVANCY

MAY 9, 2012 

Mr. Chairman and Members of the Subcommittee, thank you for the opportunity 

to present The Nature Conservancy’s views on the timing of and nature of reforms 

to the National Flood Insurance Program. My name is Sarah Murdock and I am a 

Senior Policy Advisor for The Nature Conservancy. The Nature Conservancy is an 

international, nonprofit conservation organization working around the world to protect ecologically important lands and waters for nature and people. Our mission is 

to conserve the lands and waters upon which all life depends. 

The Nature Conservancy continues to support a 5-year reauthorization of the National Flood Insurance Program through passage of The Flood Insurance Reform 

and Modernization Act of 2011 currently being considered by the United States Senate. We believe this legislation brings significant reforms which we consider critical 

to begin to address areas of the Program that are currently broken. Contrary to 

Congressional intent, the Program as it currently functions is increasing risk from 

storms and floods to people, property and ecosystems, and to the important services 

that those ecosystems provide to people. 

Enactment of The Flood Insurance Reform and Modernization Act of 2011 will 

phase out subsidies that have undermined the financial stability of the program; 

will require the Federal Emergency Management Agency (FEMA) to ensure maps 

are updated and accurate so that people understand and can better prepare for their 

risks; and will streamline and strengthen mitigation programs to help decrease flood 

risks and better protect flood-exposed communities and homes and businesses. We 

ask that this legislation be brought before the full Senate for debate and consideration at the earliest opportunity. 

The Nature Conservancy is also a member of the Smarter Safer coalition, a diverse coalition of environmental organizations, taxpayer advocates, insurance industry representatives and housing groups. Though the groups span the political spectrum, the coalition works together on insurance, natural disasters and mitigation. 

Smarter Safer also strongly supports the Senate Banking Committee flood insurance reform bill which will help ensure that the flood program can continue to provide needed insurance to Americans in harm’s way while making commonsense reforms. 

Why Reform Is Needed Now 

Waiting to implement reforms will continue a policy that results in increased risk, 

destruction of homes and infrastructure, and cost to people, property and the natural resources upon which we depend. The National Flood Insurance Program 

(NFIP) is currently over $18 billion in debt. 

Without significant reform, the NFIP will not be economically sustainable and 

American taxpayers will continue to be asked to bail out the program and subsidize 

public and private development in flood risk areas. 

Extreme Weather Events Predicted To Increase 

Results from scientific studies indicate that a changing climate has exacerbated 

and will continue to intensify extreme weather events including flooding and coastal 

storms. Over the last 50 years, Americans have seen a 20 percent increase in the 

heaviest downpours. In addition, newly published research demonstrates that proportion of category 4–5 hurricanes has doubled from 20 percent to 40 percent in only 

35 years. 1 Coastal storm surge and storm impacts will only intensify as sea levels 

continue to rise the predicted 0.6 and 2 feet globally in the next century. 2

A published study conducted by Nature Conservancy scientists and others examines the impacts of storm surge to people and property on Long Island, NY and in 

particular examines the likely added effect of sea level rise to these impacts. Just 

a little bit of sea level rise (just 1.6 feet) increases predicted impacts of storms to 

people and property by nearly 50 percent and 75 percent respectively. 3

76 

4Multihazard Mitigation Council, ‘‘Natural Hazard Mitigation Saves: An Independent Study 

To Assess the Future Savings From Mitigation Activities’’, Multihazard Mitigation Council, 

http://www.floods.org/PDF/MMClVolume1lFindingsConclusionsRecommendations.pdf, and 

Rose, A., et al. 2007. ‘‘Benefit-Cost Analysis of FEMA Hazard Mitigation Grants’’. Natural Hazards Review 8, 97. 5 Examples include a report on the effect climate change will have on Caribbean economies, 

by the Caribbean Catastrophe Risk Insurance Facility; and a study by Entergy Corporation and 

Swiss Re on disaster risk along the Gulf Coast. 6Shepard, C., Crain, C., Beck, M.W. 2011. ‘‘The Protective Role of Coastal Marshes: A Systematic Review and Meta-Analysis’’. PLoS ONE 6(11): e27374. http://bit.ly/vfAHvT 7 U.S. Army Corps of Engineers (USACE). (2009). ‘‘Flood Risk Management: Value to the Nation’’. (http://www.corpsresults.us/docs/VTNFloodRiskMgmtBrolloresprd.pdf). 8Freitag, B. S., Bolton, F. Westerlund, and Clark, J.L.S. (2009). ‘‘Floodplain Management: A 

New Approach for a New Era’’, Island Press, Washington, DC, USA. 

Associated Costs Are Increasing 

In the first decade of the new millennium, floods and flood damage associated with extreme rainfall events have increased, with damages rising from $6 billion to 

$10 billion over this time period, despite the billions of dollars invested in flood control. In 2011 alone, there were 58 Federal flood disaster declarations, covering 33 

different States. The 2011 flooding damages cost over $8 billion and caused 113 

deaths; both the costs and the number of deaths exceeded the 30-year averages. 

Clearly, these trends all speak to the immediate need to decrease risk and allow 

implementation of mitigation measures that decrease risks. The proposed reform 

legislation is the most important single step we can take toward decreasing flood 

risks. 

Maximizing Our Return on Investment by Integrating Built and Natural Infrastructure 

Under the current National Flood Insurance Program (NFIP), a dangerous feedback loop is in play. Subsidized insurance rates facilitates development in coastal 

zones and in freshwater floodplains which not only puts people and property at risk, 

it simultaneously facilitates the destruction and degradation of ecosystems that provide a natural defense to people and properties. Left in place, coastal marshes and 

sand dunes and inland wetlands and floodplains serve important flood- and stormcontrol purposes. 

The overall benefits of flood mitigation efforts implemented has been studied and 

found that for every dollar spent on flood mitigation 5 dollars are saved. 4 Other recent studies 5 show that one of the most cost-effective solutions to protect people 

from the impacts of increased extreme precipitation and coastal storm intensity will 

be to preserve, enhance and restore the natural systems that already deliver critical 

protection from sea level rise, storm surge and coastal and inland flooding. Scientists from the Nature Conservancy recently published a review of all papers that 

measured the role of salt marshes in protecting coastlines from waves and erosion. 

They found that salt marshes have a strong and significant role in the United 

States and globally in providing coastal defense and shoreline stabilization. 6

In addition to flood control benefits provided by protection and restoration of 

floodplains and coastal wetlands, these ecosystems provide many services that support and protect humans and nature such as filtering pollutants, erosion protection, 

habitat that supports fish and shellfish populations. These services provide real economic benefits that can be measured through reduced cost of water quality protection, increased revenue from fishing and increased value to personal property. 

The traditional approach to flood protection in river-floodplain systems has been 

to rely on dams and levees to contain flood waters and in coastal areas has been 

to build sea walls, bulkheads and other ‘‘grey’’ infrastructure and to ‘‘nourish’’ 

beaches with additional sand to slow erosion and diminish the impact of storms. 

While built infrastructure plays an important role in helping to secure our communities, it requires substantial investments for both initial construction and ongoing 

maintenance. Moreover, an over-reliance on built infrastructure in the United 

States during the 20th and early 21st centuries has encouraged extensive land development in areas particularly susceptible to flooding and storm damage, and catastrophic flooding when infrastructure fails. And fail it has. Despite many billions of 

dollars in taxpayer investment in flood protection, flood damages continue to increase and now average more than $6 billion annually. 7 If left unaddressed, as the 

Nation’s water and coastal protection infrastructure continues to age we should be 

expecting that these economic losses will continue to increase—including the taxpayer’s obligation under the National Flood Insurance Program—along with the risk 

faced by tens of millions of Americans who live and work behind levees 8 and tens 

of millions more living along the coast. 

77 

9 National Committee on Levee Safety. (2009). ‘‘Draft Recommendations for a National Levee 

Safety Program: A Rep. to Congress From the National Committee on Levee Safety’’. <http:// 

www.nfrmp.us/ncls/docs/NCLS-Recommendation-Reportl012009lDRAFT.pdf> (Jan. 15, 

2009). 10 ASCE. (2009). ‘‘Facts About Water and Environment, Levees’’, 2009 Infrastructure Fact 

Sheet, (http://www.infrastructurereportcard.org/sites/default/files/RC2009llevees.pdf) (Mar. 

25, 2009). 11Sommer T., Harrell B., Nobriga M., et al. (2001). ‘‘California’s Yolo Bypass: Evidence That 

Flood Control Can Be Compatible With Fisheries, Wetlands, Wildlife, and Agriculture’’. Fisheries 26: 6–16. 

Simply investing to renew the Nation’s over-reliance on built flood control infrastructure poses a daunting challenge. There are more than more than 110,000 miles 

of levees across the country, 9 the average of which is well over a half century and 

which the American Society of Civil Engineers estimates would require $100 billion 

to repair and rehabilitate. 10 The challenge also exists for coastal infrastructure. In 

Massachusetts alone, there are about 140 miles of publicly owned sea walls or other 

structures along the coast designed to protect billions of dollars of property. Most 

were designed to last a half century but are older than that now. The estimated 

price tag to repair and fortify all of them against rising seas is more than a billion 

dollars. I happen to live in the coastal town of Scituate, Massachusetts, where the 

sea walls are crumbling and in disrepair. During a nor’easter on Dec. 27th, 2010, 

a break in the sea wall occurred, flooding dozens of homes. Two homes caught fire 

and burnt to ground as firefighters could not access them through the five feet deep 

freezing water. All of the residents living in those homes were displaced for many 

months and some were forced to permanently relocate. Yet the town does not have 

the financial resources necessary to adequately repair the town’s sea walls. The 

town is seeking State and Federal resources to maintain the sea walls, yet those 

funds are becoming scarcer and more difficult to secure. Unless significant repairs 

are made, residents living behind these sea walls continue to be at significant risk. 

This is but one example of similar incidents occurring throughout our Nation. 

Instead of relying solely on grey infrastructure, an alternative approach involves 

integrating the use of natural infrastructure (or so-called ‘‘green infrastructure’’) 

with built infrastructure. This specifically involves maintaining and restoring the 

connectivity of rivers along with sufficient area of floodplain and conserving and restoring coastal natural infrastructure such as wetlands, reefs, dunes, and barrier 

beaches and islands. 

An example of this approach is the Yolo Bypass in California’s Central Valley. It 

is a 60,000-acre engineered area of the Sacramento River floodplain that was reconnected to the river in the 1930s. The system is designed such that when the Sacramento River rises during major floods and exceeds the elevation of weirs built 

within the levee, additional floodwater flows over the weirs into the Yolo Bypass 

and away from the City of Sacramento and its suburbs. Since its construction, Yolo 

has been an integral part of the valley’s flood management system, conveying as 

much as 80 percent of large floods. The Yolo Bypass not only protects Sacramento 

and the surrounding area, it does so at a small fraction of the cost of would have 

been necessary to construct and maintain traditional built infrastructure for a similar level of protection. Moreover, because of the episodic and seasonal nature of 

floods, Yolo has continued to act as economically valuable and productive farmland 

while providing additional benefits such as critical habitat for fish and water fowl. 11

On the Gulf Coast, The Nature Conservancy is focusing efforts on restoration of 

sea grass and oyster reef habitat both of which serve to greatly diminish coastal erosion and mitigate impacts from storms and flooding. Over the past 100 years, the 

oyster reef habitat has severely diminished and this has contributed to increased 

coastal erosion and vulnerability to storm impacts. In Alabama and Louisiana, The 

Nature Conservancy has created 5 miles of shoreline—protecting oyster reefs and 

directly supported 227 jobs through the work to create these reefs. Working with 

partners, our goal is to develop 100 miles of oyster reef breakwaters/living shorelines in Alabama that will in turn promote the growth of more than 1,000 acres of 

coastal marsh and sea grass. 

The Nature Conservancy and dozens of diverse partners across the country recognize the long-term effectiveness and cost-efficiency of connected river-floodplains and 

in conserving and restoring coastal wetlands and reef habitats in helping to reduce 

flood risk, while providing other economically important benefits such as continued 

agricultural production, enhanced water quality, and improved fish and wildlife 

habitat and associated recreation. Floodplain restoration projects such as Mollicy 

Farms in Louisiana, Emiquon and Spunky Bottoms in Illinois, and Hamilton City 

in California are further demonstrating the many values of this approach and unVerDate Nov 24 2008 11:15 Apr 25, 2013 Jkt 048080 PO 00000 Frm 00081 Fmt 6621 Sfmt 6621 L:\HEARINGS 2012\05-09 AM ZDISTILLER\50912AM.TXT JASON
78 

derscore the commitment of the Conservancy and its partners to implement these 

projects and realize the associated high returns on investment. 

Nature Conservancy Supports Legislative and Administrative Reforms 

Enactment of The Flood Insurance Reform and Modernization Act of 2011 will accomplish several policy objectives. It will put the program on a path of financial sustainability, will improve communication of risk through more accurate, higher quality maps, and finally will streamline and strengthen mitigation programs to help 

decrease flood risks and better protect flood-exposed communities and homes and 

businesses. In addition to passage of the legislation, there are additional policy 

changes that support the legislative goals that are needed and could be achieved administratively that would support, amplify and run parallel to the legislative reform 

efforts. 

The Nature Conservancy supports the following three key provisions of the Senate 

Flood Insurance Reform and Modernization Act of 2011 and corresponding administrative reforms: 

Scientifically Accurate Mapping of Current and Future Risk 

Providing scientifically sound data and information related to flood risk, land use, 

and natural resources is essential to communicating the actual flood risk to people 

and properties. Information on future changing climate conditions must also be incorporated to enable individuals, communities, and regional and State Government 

entities to sufficiently plan to mitigate their flood risks. The Senate NFIP bill accomplishes this by requiring the incorporation of the most accurate science on current conditions and future conditions by assessing the best available climate science 

related to flood risks including the impact of sea level rise and other future conditions. The bill also requires outreach and education to property owners to ensure 

sharing of this new risk based information. 

Charging Rates That Accurately Reflect Flood Risk 

Only if rates reflect the true risk to people and property will people understand 

the true risk of living in or developing certain areas and act to discourage development in the most risky areas. Additionally, the current Program allows and subsidizes redevelopment in flood risk zones, not properly incentivizing retreat of structures and restoration of the important natural systems. It is the American people 

who are currently supporting the subsidization of this Program through our tax dollars, and this subsidization occurs regardless of the economic status of those benefiting from it. The National Flood Insurance Program will never be financially sound 

until actuarial sound rates are charged. Currently there are 1.2 million NFIP properties (20 percent) that are charged premiums well below the actuarial value of the 

insured liability. On average (including subsidized and unsubsidized policies) NFIP 

premium collections cover approximately 70 percent of the actuarial value of the insured liability. The Senate bill makes a number of needed reforms to put the flood 

insurance program on sound financial footing by eliminating subsidized rates and 

allowing for rates to be adjusted reflecting true risk, taking into consideration future conditions. Charging actuarial sound rates for properties in flood hazard areas 

will greatly improve the public’s understanding of the true risk of living in such 

areas. Such understanding should drive better decisions related to development and 

implementation of mitigation measures. 

We recognize that increase rates for flood insurance will place an economic burden 

on people of lower economic means living in flood prone areas. The Senate bill does 

not and should consider the affordability of increased flood insurance through implementation of a voucher system or some similar means tested assistance. At a minimum a thorough study of the issue of affordability of flood insurance needs to be 

conducted to determine the extent to which this is an issue. 

Ensuring Nature-Based Solutions Are Properly Incentivized and Funded in All 

FEMA Programs 

The Senate bill will accomplish improvements related to the use of hazard mitigation grant funds and the ability to use grant funds to accomplish conservation and 

restoration of freshwater and coastal ecosystems by consolidating, streamlining and 

making more efficient the existing programs and clarifying that voluntary buy out 

of properties are an allowable use of these funds. 

As discussed above, preserving and restoring natural ecosystems like floodplains 

and coastal wetlands can provide cost-effective protection against some of the 

threats that result from current natural disasters which will be exacerbated by climate change. For example, coastal ecosystems like wetlands, mangroves, coral reefs, 

oyster reefs, and barrier beaches and intact freshwater floodplains all provide natural protection from storms and flooding in addition to their many other benefits 

79 

such as habitat for fish populations, water quality improvement, economic development from recreation and tourism. Incentives to protect and restore floodplains in 

the Mississippi River valley could substantially contribute to reducing the dead zone 

in the Gulf of Mexico. The Conservancy supports greater emphasis placed on use 

of hazard mitigation funds for the purpose of conservation and restoration of natural 

systems like floodplains and natural coastal ecosystems. 

While the legislation begins to make more efficient the mitigation programs of the 

NFIP, more changes need to occur to enable, facilitate, and encourage floodplain and 

coastal protection and restoration. Doing so will play a significant role in returning 

the National Flood Insurance Program to solvency, thereby making a relatively 

modest—yet important—contribution to Federal debt reduction. Overall greater emphasis should be made to improve these programs which as cited before, return $5 

in reduced cost for every $1 invested. Improvements should include overall increased funding for the mitigation programs and increased effort to link the FEMA 

mitigation programs to programs with similar goals of other Federal agencies, including FEMA’s other mitigation programs that fall under the Stafford Act. Several 

important administrative changes should also be considered that will additionally 

facilitate use of the mitigation funds for floodplain and coastal restoration. Such 

changes involve changes to how FEMA calculates the cost and benefit of mitigation 

activities. Currently, clear economic benefits such as water quality improvements, 

flood reduction benefits, and fisheries revenue enhancement are currently valued or 

considered. 

These policy changes will better protect American communities from the threat 

to life and livelihood of future flooding, improve the quality of our drinking water, 

and help restore the health and productivity of the Nation’s rivers and estuaries. 

Summary 

Thank you for the opportunity to present The Nature Conservancy’s recommendations on the need to pass the Senate’s 5-year reauthorization of the National Flood 

Insurance Program and why we implore immediate reform to begin to fix aspects 

of the Program that are currently financially and environmentally unsustainable. 

80 

ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD

PREPARED STATEMENT OF THE AMERICAN INSURANCE ASSOCIATION 


509am039.eps

• 

1 Amerlc8f:j Insurance A8soclatlon 

TlU: AMERICAI'II INSlfRANCE ASSOCI,\TIO,'I; 

Ul\IT£D STATf. SS AT :O \I nTT ON BA, ... ... L .. C. Il00SIi'<C, A.sO UR8AN A~ RS 

SUBCmm mE[ ON [ CO' "OMIC POLlC'!' 

May 09, ZOlZ 

Th\.I AOIrrt(;u1 nsor:lllC~ M5OClallOll (AlA) appf"(Ct:lI 5 the Subcommittee' 5 anCnBO" to \hIS Important 

ISsue: and IS pleased IOsubmnlhls slalcmcnl 011 the need W n'fonn and Il:authoruc the N31ional Flood 

Insurance Pr~ (NFJP) 

AlA rqm:!l:nls IlCarl)' 300 major U.S. JnSUr.l!1CC comp;!l1ics lh.:n p!lll'idt 31III1IC5 ofpmp!:r!)' and casually 

I!l5UfMCC to lJ.S OOJl'lunlefS and busllli:S!Cs. I'ritingSIOO billioo annually In preOllUnlS AlA and scvernl 

of lIS members w a1i\O members oflhe -WriW-YOIIr-Own Flood InSUrntlCC CoolltlOO (WYO Coalitioo). 

a group Wtllnclud.::s pJJ\a1e msurers t1ur partiCipate In tile NFIP Wnle-Y ClUr-<h, n program, 

The NFIP's cmn,:ntauthonlaDOn C-'qllrcson Ma) 31.2012 The nc.\\ da) is the ofliclal sun ofHumcanc 

scasoJ1. As thl'5C I\\'oe\~n!s dr,1II ".:ar. '\Ii cntlc:tl th:tl the-NFIP 00 fC.'Iut/lomro for the sakcofoor 

croI1OI1l), our rommW)itlt'S illld t/l~ ProgrlIIl' 5 ; ,6 million polic)noldcrs, 

BACKCROUND 

Prior to its current extension, tbe Nfl? h.l'l ':'~p.!ricnct1:l n:p.::iud short-term C.\lenslon~, indudin,g foor 

3Ctll3l lapso:s llhen the progr.un II as clf~al\'('ly ull3bk to 1\TIti: nl'\l or n:newcd business Thosc.I3pSCs 

hindered Odmo:rurn; COIlSllfficr housrngdCiSlngsand call1l:d SIgnificant ilIIccrtamt) for our n.:I!lOll'S 

millions ufNFIP pollc)holders. as \l-ell ill n:a1..esl.3tc pJOf~5S1OTl31s.lendcrs. 3nd Insurers ,\IA 3nd its 

member comp.llllCS bchc~c l.h3l a long-term c,\tcnSIOli. combined II lIn essenUai n;ronns-. IS nceded to 

bnng $labl\;l) and cclUlT1t) to me progr.m 

As II~ halC PI1)\ Ioosly cOInmumc;ucd. a romCrstOllC of AlA' S n:uur.1l c-a!aslmphc agcmla IS ml\1I\Ingfo\ 

reroml ufthe NFlP, Whcll COIlsHkrmg NFIP nfouns. AlA Wid ,ts mcrnbcl1 surt linn Ihe rolloI'm!; 

pnnciplcs' il) program cclUlT1ly IS fim aJ1d fo~t. and ill premiums DCcd to tw:ncr reflect rISk 

FollolIJng from these 1\\0 pnnciples., AlA COIIlmlli:S 10 :wmt:l!e for SCI'Cr.J.! rerum" . Mao)' of these 

/l:forms all! Inclt>d~ In Ii:Sl.'ilation approI~d ~ the Si:rolc &n~rng Comlnll1l"t (5 IQ.lO) alld IQ 

legislation (H.R. 13(9) passed bj the HQ!1Se of Repn:scnullves III lui) 20 II, 
81 


509am040.eps

Specifically, any Icgislation 10 refonn and reauthorize the NFlP should include: (I) a mcaningful longterm extension of the program: (2) mOl-emen! toward risk-based premiums: (3) a reduction in price 

subsidies; (4) deductible increases that help increase progmm capacity while encouraging mitigation bl' 

consumers; (5) an increase in col'eragc limits that hal"C not changed in more!han 15 years; and (6) 

authorization for the purehase ofadditioll.1J liling expense c()\"crage (rcsidential)or business interruption 

coI"crage (commcrcial). Again, man)' ofthese reforms are included in proposals currentl), before the 

Congress. 

Meaningful Extension/Reauthorization orlhe Program 

AlA continues to support a long-term reauthorization of the NFIP to proted consumers and belp increase 

stability for real cSUte transactions and policyholders. AlA beliel'es that a long-term reauthorization, such 

as a firc-),care:l.lension, will provide certainty in the flood program thereby increasing consumer and 

business confidcnce in the NFlP, MoreOI·cr, AlA belicl'cs that a long-term extension is necessary to 

allow for meaningful rate and premium appreciation so that the program rna)' get on a solid financial 

footing and allow prices to more accurately reflect risk. 

Premiums Refle(ting Risk 

The NFIP must ensure that premiums forcorerage reflect the true costs to tl.wayers so that flood loss 

subsidies can be eliminated Ol"Crtimc. Understlnding that this could cause significant hardship for tho;.; 

who cannot afford true risk-bascd premium payments, a possible solution is agol'enunent premium 

subsidy that could be prol'ided outside of the NFIP" We beliel'e this could be lessexpensi\"C 10 tl.xpayers 

than flood loss subsidies and would likely result in more coI'erage being purehased while rcducingcrosssubsidies thai make the program less attractil'e to many potential policyholders_ 

Legislation approl'ed by the Senate Banking Committee, as well as H_R 1309, take positil·c steps toward 

better pricing NFIP coverage. Both bills would increase the permissible annual premium - the so called 

-daSlicit)' band and mOl'e toward J\:tuanal rates for a l'JriCl}' ofpropertics-(l) commereial properties. 

(2) second homes and 1'J\:ation homes, (3) homes sold to ncw owners, (4) homes damaged or improl'ed, 

(5) homes with multiple claims, and (6) pre-FIRM properties. These are all positil'C steps that mOl'e Ihe 

program towards a better financial position. 

Changes to Coverage 

WYO insurers help administer 95 pef(em of the NFIP business providing Jll3ri;et penetmtion, innOl'ation 

and efficienC)'. Unfortunatel)" the numberofhomcowners and businesses purehasing flood insurance has 

dropped from its peak following the 2005 hurricane season. In order to ma.ximize the program's 

effcetiveness and reduce its reliance on the treasury, participation in the NFlP nceds to continue to grow 

and consumcrs should be encouraged to purehase flood cOI'Crage. 

For sel'era! ~'Cars AlA has supported changes in flood covcrage to make the product more attractive. 

These include (I) increasing coverage limits which will mean fewer um;OI-ered losses for consumers 

while allowing g.realer premiums to be collected by the program; (2) increasing deductibles which Ilill 

allow consumers to sare more on premiums by assuming greater risk while encouraging mitigation: and 

(3) allowing the purehase of additionallil'ing expense coI·erage (residcntial) or business intcrruption 

coI·crage (commercial) thereby prol'iding consumers Ilith greater product options, Undertaking these 

steps will increase product dil-ersification Ilhich should encourage more consumers to consider 

purchasing NFIP flood col'Crage. 
82 


509am041.eps

Other PrOp<l'!a ls Being Considered 

During the continuing discussions to reauthorize and reform the NFIP sel'eral additional proposals hal'e 

been brought fOnl'anI_ One such proposal ,ente!> on the notion of immediately -prilOltizing the flood 

insurance program. AlA strongly supports an open and free martet environment: howel'cr, the NF[P was 

created prcrisel)' because the prilOltc insumrn.:e market could not write flood insurance on an 

economicall)' feasible basis in the I'ast majoritl'ofinstances. The NFIP arose from the simple fact that 

prior to 1968, for all practical pUipOses. flood insurance that was both actuariall), sound and affordable 

was unavailable to the home--owning public because it was subjCC110 such acute ad,'Crse selection (only 

those who need it 1I0uid purchase it)_ Indced, long before the creation of the NFlP, private insurers had 

effectively stopped providing flood COI·CragC. 

While it constitutes adeclining pereentage of all NFIP policies. the number ofpropcrties rcreil'ing 

subsidized premium rates has grown since [985; b\' 2007 it was at its highest point in almost 30 YC.lfS, To 

date, more than half of the subsidized poIi,ics are cOllCentratcd in fll'C SlaIeS with relatj'-ely high flood 

risk, Based on oure.\j>Crience , these subsidies would not vanish if the NFIP were pril'atized. 

Unfonunately. in many stales - including those states thatar\: exposed to losses by natur.i.l c;ltastrophcsInsure!> face artl1t~' rate supprcSSlon. That said. any dlSCUSSIOll ofpnl'3uza\lOll ohhe NFtP ortarge 

portions of it must be carefully considered. 

CONCLUSION 

As we noted in our September 8, lO[ [, lcllcrlO the Senate Banking CommilleeOll AlA and its member 

companies have consistently advocated for legislation that prol'idcsa long-term e.xtcnsion and includes 

essential reforms that are nceded to bring stability and certainty 10 the program, The bill cumntly before 

Senlte accomplishes these goals by inclooinga fh-e.year reauthorization and mOl-ement toward risk· 

based premiums. AlA stands ready to assist the Committee as this important [egislation mom forward. 
83 

PREPARED STATEMENT OF THE MORTGAGE BANKERS ASSOCIATION 


509am042.eps

II r1'N'WR~E ] ASSOCiATKlN' -'-

Statement of 

The Mortgage Bankers Association 

Senate Committee on Banking, Housing and Urban Affairs 

Subcommittee on Economic Policy 

"The National Flood Insurance Program: 

The Need for Long Term Reauthorization and Reform" 

May 9, 2012 
84 


509am043.eps

CMirman Tester, Ranking Member Vitter aod members 01 the Economic Policy subcommittee, 

thank you for the opportunity to provide this statement on beha1f of the Mortgage Barl<.ers 

Association (MBA'). We wish to express our support for long·term reauthorization of the 

National Flood Insurance Program (NFIP). We respectfully urge the Senate to move quickly to 

reauthOOze the program and avoid a costly lapse in coverage. 

As you may kr.ow, more than 5.6 million policy holders in 21 ,000 communites nationwide 

depend on the NFIP as their main source of protection against property losses that resutt from 

flooding. Without Hood insurance, many residential and commercial real estate transactions 

across the country will come to a haiL as federally backed mortgage loans c.anr.ot legally be 

secured without this ctitic.al protection. Failure to reauthOOze the program could jeopardize 

nearly 40,000 mortgage closings per month. 

In July 2011, the House of Representatives passed a bi-partisan measure, H.R. 1309, by a vote 

of 41)6.22. On September 9,2011 , the Senate Banking Committee unanimously approved its 

version of the 5-year bill. Both proposals indllde a long-term reauthorization and important 

reforms that will optimize the current program, make needed improvements to the floodplain 

mapping and appeals processes, and other key reforms that will el"l(:(XJrage program 

participation and put the NFIP back on the path to sound finaflCial footing. 

Without a reliable and uninterrupted source of flood insurance, ~ believe mortgage credit 

woutd, at best, be more expensive or, at worse, unavailable in many markets. Although there 

are private providers of ~ood insurance, mil lions of policies are .....,.itten through the NFIP. The 

Senate should take this opportunily to capitalize on the bipartisan efforts by both the Senate 

Banking Committee and the House of Representatives thus far to make major improvements to 

this important program. We believe that passage of a comprehenSive, bipartisan Hood 

reauthOOzation bill is within reach, and ~ respe<:tfully thank you for your efforts to schedule 

such a debate 

One such opportunity is through S.194O, The Flood InsLJ"ance Reform and Modernization Act of 

2011. We believe this bill, with a few important changes, is the perfect vehide to con~ ue to 

advance the issue. We have outlined below some suggested areas of improvement and look 

foIward to working over the course of time with Congress to achieve a sustainable flood 

insurance program. 

Clarification of Multifamily Property Coverage: (Sections 105, 132, 135) MBA strongly 

supports NFIP coverage of commerciaUmu~~amily properties and efforts to darify coverage of 

multifamily and healthcare properties at coverage limits available to other commercial 

properties. We believe, however, that darific.ation of S. 1940 is necessary in light of the 

provisions of the National Flood Insurance Act of 1968 (1968 Act) and to ensure that properties 

rurren!jy eligible for coverage under the NFIP (e.g., mu t~am ly properties) are not inadvertently 

exduded, Accordingly, the legislation should make dear that commercial property coverage 

applies to mumfamily properties (i.e., properties or structures containing 5 or more residential 

housing units) and other properties that serure ~ns eligible for insurance by the Federal 

Housing Administration or purchase by Fannie Mae and Freddie Mac. 

I Tho Mor1IJ1!l" 8onI<e" A$$ociotion (MBA) it tho ",tio<"ellosocit1"" ,*preteniWIg tho ,UI est ... rr.ar.c. Rl<*)" In """'""" 11\01 

employs .,.re lill. 2l'O.OOO people in m .. ", 0'Iffj OOIlllTllNy in IPIe """'Irj HNclqwrrered in WHhirIgIon. D.C ...... I _ lion 

"""'" to ensrn .... corn".eo IIIIeI1gIh 01 b 111110.', resldeNili ond commerciol '"' HIlI ....... 011: 10 e>:plrld homeownenllip 

Irld e_ acce .. to 1_* i'Io!IsirIg 10 11 1Untr'a ... MBA prcmoies fIir I rld eIhicIl Itodilg ptJdm ..... 105101' pro/essicnII 

"e.1\trIOt lmong ,.., m .. l-.r.::t empkl)'tl$ i:twou;Ih I .... ""II" 01 ~I progama Irld I ... ritty 01 ~Iiont. .. ... e<rt>trat>'p 01 ".., 2.200 o;(IrOp'nin incbIe$ I_ . iemerl1 01 ,", ...... l-.r.::t mor\O'!l" o;(IrOP' .... "'()r\(Il!l" t.-oI<fl, 

C()!'Mltrcill t:.nb, Itriia, WIll s:tr.tl COI'IdLQ, kit ns.nr.::t ~nits and od\trI in b "'orto>!l" itnding fitld F(:< .ddI: .... , 

irlbllllltlon. visit MBA', Wob lite; mortga!l"" "'" 
85 


509am044.eps

Frequency of Payment: (Section 106) MBA appreciates the intent of the Senate to make flood 

insurance more affordable by allowing (where flood insurance is not escrowed) the 

Administrator to provide an option of paying premiums either annually or in more frequent 

installments. We note, however, that in lending transactions, insurance policies (including flood) 

are generally required to be paid one year in advance with monthly escrows accumulating to 

pay the next year premium. We urge clarification that lenders not be precluded from requiring 

that the flood insurance policy be paid one year in advance. We are concerned that allowing 

flood insurance premiums to be paid monthly may result in increased policy lapses and, in 

lending transactions, increased need for forced placement of the insurance. 

Enforcement: (Section 110) MBA urges the Senate to reconsider the increase of penalty 

amounts and elimination of the ceiling on penalty payments. We note that lenders are 

dependent on professional flood zone determination companies to assess the need for flood 

insurance. While we acknowledge that a systemic failure to knowingly require flood insurance 

may result in penalties, we urge the Senate to either retain the existing penalty provisions or 

provide a safe harbor that limits increased penalties to a willful and systemic failure of the lender 

to require coverage. 

Continuation of Insurance: (Section 110) We urge the Senate to adopt a provision found in 

H.R. 1309 clarifying that, in order to avoid a lapse in insurance, the servicer may charge a 

borrower for lender placed insurance when the flood insurance amount is insufficient or the 

borrower cancels or allows the flood insurance policy to lapse. The House provision would 

clarify that after the running of the 45-day notice and the borrower's failure to produce evidence 

of insurance, servicers can obtain and charge for lender placed coverage that starts with the 

date the NFIP (or private) flood insurance coverage lapsed or did not provide sufficient 

coverage. 

Mandated Escrows: (Section 111) The bill mandates escrows for flood insurance payments. 

This is problematic for several reasons. First, some mortgage companies (e.g. second 

mortgage lenders) do not have the capacity to escrow. Congress recognized this fact and 

excluded second lien lenders from escrow requirements in the Dodd Frank Act. Second, many 

borrowers have contracted for non-escrowed mortgages. Imposing escrows on existing 

borrowers would repudiate their negotiated contracts. Third, many borrowers with low balance 

loans have traditionally been allowed to manage their own insurance payments. Section 1461 

of Dodd Frank recognized this, and limited the mandatory escrow provision to higher-risk 

products and to the first five years of the loan. We recommend that the escrow of flood 

insurance premiums remain a loan term negotiated between lender and borrower. However, if 

the mandatory requirement remains, we urge the Senate to conform S. 1940 to the 

requirements of the Dodd Frank Act. 

Payment of Flood Insurance Invoices: (Section 111) We urge the Senate to make a 

correction to eliminate the requirement that a lenderiservicer pay "the remaining balance in the 

escrow account" to the flood provider upon receipt of the invoice. Lenders collect insurance 

payments each month (estimated based on the prior year's invoice) to pay the next year's 

premiums. We note that, in addition, RESPA permits a 'cushion' above the estimated premium 

amount to avoid a zero or negative balance in the escrow account. As a result, the balance in 

the escrow account at the time of flood insurance invoice is unlikely to exactly equal the amount 

required to pay the flood insurance premium. 

Notification upon Loan Termination: (Section 111) MBA recommends deletion of this 

section. The flood insurance policy is a policy between the property owner and the insurance 

provider. Loan payoff does not generally result in termination of the borrower's policy. 
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Lender Required Notice: (Section 124) Lenders do not curren~y provide notice related to 500 

year Hood plains. The ability to meet this requirement will be dependent on FEMA mapping of 

the 500 year flood plains and provision of this service by a flood zone determination company 

able to provide, make, and maintain sudl an assessment. We, therefore, urge the Senate to 

eliminate this provision. Additionally, we recommend a change to require that notice be 

delivered to the botrower rather than the 'purdlaser or lessee.' 

Elimination of Subsidy: (Section 106) proposes to exclude certain properties from receiving 

subsidized premiums, including A) noll-primary residences, B) severe repetiti'oie loss properties; 

C) properties that inaxred flood--related damage equaling or exceeding the fair mar1<.et value of 

sudl property, D) business properties; or E) properties that on or aller enactment of this bill 

sustain damage exceeding 50 percent of the fair mar1<.et value or obtain improvement exceeding 

30 percent of the fair market value of such property. These properties would be subject to a 

four-year phase-in of higher premil,l:l1S. However, the phase·in benefits are not available to 

"new policies" (e.g. sales of homes) or "lapsed policies' (e.g. delinquent borrowers). As a result, 

it is not dear whether the phase-in travels with the property. For example, 'M)uld a pre·FIRM 

property newly remapped into a SFHA one year from enactment receive the benef~ of the 

phase 001 01 the sl.bsidy? 

Relief to Affected Property Owners: (Section 106) INhile MBA understands and supports the 

need to adopt more actuarially sound rates for flood insurance, many mar1<.ets are suffering 

record unemployment and property value dedines. We are concerned that the phase-out of 

subsidies will negatively affect certain commun~ies, causing more delinquencies and REOs. As 

a resuH, we ask that you consider adopting a 5-year or longer phase-in period, consistent with 

the time period offered in HR 1309. Moreover, we urge the Senate to provide for greater 

mitigation relief to resklential properties affected by the elimination of the subsidy. 

Defaulted and REO: (Section 106) In addition, MBA urges the Senate not 10 eliminate the 

phase-in benefits on lapsed policies for defaulted borrowers or REO properties. Wrthoul this 

dlange, complying with the National Flood Insurance Program will become even more 

burdensome for borrowers experierlcing financial difficulties and will harm lhe ability to resel l 

REO. 

Effective Date: (Section 106) To benefit from the phase-in, properties must be insured by NFIP 

insurance as of the date of erlactment To encourage reinstatement of voluntary flood coverage 

of lapsed policies, we recommend that homeowners be given 90 day5 after the effective date of 

the Act to obtain NFIP insurance. 

Conclusion 

MBA supports extension and reform of the National Flood Insurance Program to provide 

certainty as to the availability of ftood insurance and the continued viability of the program. We 

are available to 'M)rk with the Senate to respond to questions or concerns or to provide 

darification as you contemplate passage of this important piece of legisla~on . 
87 

PREPARED STATEMENT OF THE NATIONAL ASSOCIATION OF MUTUAL 

INSURANCE COMPANIES 


509am046.eps

IVI I -_® ( : 

NATIONAL ASSOC IATION OF MUTUAL INSURANCE COMPANIES 

Statement 

of 

National Association of Mutual Insurance Companies 

10 the 

Umted States Senate 

Committee on Banking, Housing and Urban Affairs 

Hearing on 

The National Flood Insurance Program 

May 9, 2012 
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509am047.eps

Comments of tile Nabonal Associati on ofMutuallnslXanoo Companies 

Nationa l Flood Insurance Program Reform and ReauthOlization 

May 9. 2012 

Page 2 

The National Association of Mutual Insurance Companies (NAMIC) wishes to express its 

support for S. 1940, the Flood Insurance Reform and Modernization Act of2011 . We believe the 

bill, as drafted. responsibly reauthorizes the National Flood Insurance Program (NFIP) while 

enacting real refonn. We appreciate the leadership of the Senate Committee on Banking, 

Housing and Urban Affairs and we respectfully request Majority luder Harry Reid to bring the 

bill to the Senate Floor for consideration. 

Founded in 1895, the National Association of Mutual Insurance Companies (NAM IC) is the 

largest and most di\'erse property/casualty insurance trade association in the United States. Its 

1,400 member companies write all lines of property/casualty insurance business and include 

small, single-state. regional, and national carriers accounting for 50 percent of the 

automobilelhomeowners market and J I percent of the business insurance market. We also have 

over a quarter of the companies that part1c1pate 1n the ~'W s "Wnte-Your-Own" program as 

members. NAMIC's membership Indy represents a cross-section of the industry and has been 

proudly protecting its policyholders throughout Nonh America for many years. 

NAM IC is proud to team up \lith over 25 organizations to "Flood the Hill ~ this month to call for 

a Senate vote on flood insurance refonn. "Flood the Hill" consists of, fourteen trade associations 

representing 76,$71 companies; four professional associations representing 1,496,000 imlil'illulli 

members; two environmental groups representing $,000,000 int/il'illullllllemberI; and eight 

private companies representing 1/9,891 employees. 

NAMIC appreciates the Senate Banking Committee's unanimous passage of this bill on 

September 8, 201 1. Much like its House of Representative counterpart - HR 1109. lire Flood 

Insllrance Reform ACI of 2011, which passed by a vote of 406-22 - the Senate bill also enjoys 

wide bipartisan support. While the House and Senate reform bills are not identical, they share 

the same goals and are close enough in concept that passage of comprehensive legislation is 

within reach in the 112lil Coogress. We thank Chairman Jon Tester and Ranking Member David 

Vitter for holding this hearing and once again demonstrating the broad support for flood 

insurance refonn and reauthorization. 

R~rorming th~ !"ational Flood II1 l1r~l1~ f Program 

The NFlP is a vitally necessary program, but in its current form is on the brink of insolvency. 

Without reforms, the economic cost of flooding continues to be shifted to taxpayers and 

irresponsible development in flood-prone areas remains encouraged. NAMIC believes the 

reforms in S. 1940 go a long way toward restoring the program's financial sustainability and 

preserving the program's benelitto the country. Specifically, we believe NFIP reform must 

address the following four issues: I) update premiums to accurately reflect risk; 2) create a fair 

and comprehensive floodplain mapping process; 3) reduce severe repetitive loss claims; 4) 

encourage pre-disaster mitigation. 

First, the NFlP must charge risk-based premiums Insurance rates should more accurately reflect 

the true cost of providing coverage, but they currently do not under the NFIP model. As the 
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Comments ofllle NattQnal Ass(l(:iatiOfl of Mutual Insurance Companies 

National Flood Insurance PfI)Qram Reform and Reaulllonzation 

MayQ,2012 

Page 3 

NFIP currently stands, it rates are inadequate and do not match the risk faced by many of its 

insured. NFIP rates are often as much as 60% below actuarially sound rates, The inadequacy of 

the rates led the program to e.xperience significant losses from major floods such as those we saw 

in the 2005 stonn season. The over $20 billion debt assumed by the NFIP after Hurricane 

Katrina fell on Ihe shoulders of alilaxpayers, Without reforms, the next major Slonn causing the 

NFIP to exceed its reserves will force the "''FIP 10 borrow billions more from the U.S. Treasury. 

The phase-in of sound rates provided by S. 1940 is a sensible approach to puning the NFIP on a 

sound fiscal footing. 

FEMA's flood maps must also be updated based on the best available science. inC()rporating 

expert opinions in the public and private sectors at Ihe local, state and federal levels. Accurate 

maps are necessary to accurately predict flood risk, which is necessary for the aforementioned 

nsk-based rates. We also support the fair appeals process alloWIng for community mputln the 

mapping process. NAM IC believes that the Technical Mapping Advisory Council created by S. 

1940 would accomplish this goal. 

Further, the NFIP must reduce the number ofrepetitive loss properties participating in the 

program. According to a 2011 Govemment Accountability Office (GAO) report. 1% of the 

flood policies account for between 25-)0% of the claims, S. 1940 properly implements riskbased rates immediately for severe repetitive loss properties. Once the policies reach tJUe 

actuarial rates, the high C()st offlood insurance should either C()ver future claims or force owners 

to drop their coverage. Either scenario will result in fewer claims for the NFIP and will 

discourage rebuilding in high-risk areas, 

Finally, FEMA should encourage better pre-disaster mitigation NAM Ie strongly suppons the 

report commissioned in S. 1940 on the inclusion of building codes in floodplain management 

criteria. Building codes have been shown to save lives, prevent severe propeoy damage, and 

reduce the need for federal disaster relief. Therefore we would encourage yO\.lIO adopt the 

partnership approach in H,R. 1309 that would give local communities the ability to reduce 

potential property loss though the use of Community Block Development Grant funds for local 

building code enforcement. 

Reauthoriling the Na tional Hood Insnrance Program for the Long Term 

Long tenn reauthorization of the NFIP is vitally needed by the stJUggling housing, constJUcrioo 

and financial markets. Above all, Congress must avoid another lapse in NFlP authorization at all 

costs. Failing to reauthorize the NFIP could jeopardize nearly 40,000 mongage closings per 

month, aC«lrding to the National Association of REALTORS. 

More than 5.6 million policyholders in 21,000 communities natioo\\-ide depend on the NFIP as 

their main source of prote(;tion against propeny losses that result from flooding, Without flood 

insurance, many residential and commercial real estate transactions across the country will come 

to a stop, as federally backed mongage loans cannot legally be secured .... ithoutthis critical 

protection. 
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Comments ofllle NattQnal AssooatiOfl of Mutua l Insurance Companies 

National Flood Insurance PrClQram Reform and Reaulllonzation 

May 9, 2012 

Page 4 

During a lapse, there is much cOflfusiOfl regarding the elTective tenn of the policy and whether 

consumers and businesses have flood insurance protection. The repeated last-minute short-tenn 

reauthorizations forces consumers, lenders, agents and insurers to repeatedly take steps to 

prepare for the contingency that Congress fails to reauthorize the I\'FIP. Long-term 

authorization will provide more certainty to the private market partners of the NFJP - '·Write 

Your OWll" carriers - so they may model their business plans for deeper market penetration and 

higher take-up rates. Consumers and businesses need a reliable program that can provide longtenn access to flood insurance S 1940 fulfills that need by reauthorizing the NFIP for five 

years. 

Conclusion 

The NFIP is in need of significant reforms in order to continue providing flood protection to 

those who need it. NAMIC supports this reform legislation and believes that S. 1940 is an 

elTective way to balance the many goals of the reform elTort: fiscal soundness, alTordability of 

insurance, adequate coverage for those at risk, floodplain management (reduction of flood hazard 

vulnerability), economic development, individual freedom, and environmental protection. 

NAMIC thanks the Senate Banking Committee for its leadership so far on S. 1940 the Flood 

Insurance Reform and Modernization Act of2011 . We urge the bill's many supporters to speak 

to Senate leadership about scheduling a floor vote on this important legislation before the end of 

May. 
91 

PREPARED STATEMENT OF THE AMERICAN BANKERS ASSOCIATION 

AND THE AMERICAN BANKERS INSURANCE ASSOCIATION 


509am050.eps

Statement for the Reco rd 

011 Hclraffo/the 

AMERICAN BAN KERS ASSOCIATION 

and the 

AMERICAN BANKERS INSURANCE ASSOCIATION 

F()r tilt fiearlJll; 

·The National Flood Insurance Progranl. 

The Need for Long-T eon Reauthorization and Refonn" 

Before Ihe 

Suocommillee 011 Economic Policy 

Con11ninee on Banking, Housi11g, & Urban Affairs 

United States Senate 

May 9, 2011 
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509am051.eps

Statemrnl for thr Record 

on Ikh~lf of the 

American B~nkers Association 

For the llearing 

"The National Flood Insurance Program: 

The Need for Long-Term Reauthoriution and Reform" 

Before the 

Subcommittee on .:conomic Policy 

Committet on Banking, Honsing, & Urban Affairs 

United States Stnalt 

The American Bankers Association (ABA) is pleased that the Subcornminee is holding this 

important hearing (Flood Insurance - Long Term Reauthorization) and appreciates the opportunity 

to submit a statement forthe record_ The American Bankers Association represents banks of all 

sizes and chaners and is the voice of the nation's $1] trillion banking industry and its two million 

employees. 

The American Bankers [nsul1Ince Association (ABIA) is a subsidiary of the American Bankers 

Association (ABA). As the only Washington, DC based full service association for bank-insurance 

interests, ABIA is dedicated to funhering the policy and business objectives of banks in insurance. 

The ABIA's mission is to develop policy and provide advocacy for banks in insurance and to 

support bank insurance operations through research, education, compliance-assistance and peer 

group networking opponunilies. 
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Members of the ASIA include banking institutions of all asset sizes, insurance companies, senice 

providers, consultants, mortgage companies, credit card companies and associations. The 

membership makeup is approximately 55% banking institutions and 45% all other providers. 

We would like to share with the Subcomminee our concerns about the problems created by lapses 

in the authorization of the National Flood Insurance Program (NFlP) as well as suggestions for 

long-term refonn and reauthorization. 

Since 1968 nearly 20,000 communities across the United States and its territories have participated 

in the NFlP by adopting and enforcing flood plain management ordinances to reduce future flood 

damage. In exchange, the NFIP makes federally-backed flood insurance available to homeowners, 

renters, and business owners in these communities. 

The NFIP's authorization has been subject to short-term extensions in recent years, and has, at 

times, been allowed to lapse before being re-authorized retroactiyely. Such lapses create procedural 

and compliance difficulties for lenders and unne<:essarily delay borrowers seeking to purchase 

homes. More than 5.6 million policyholders in 21 ,000 communities nationwide depend on the 

NFIP as their main source of protection against propeny losses that result from flooding. Without 

fl ood insuTllnce, many residential and commercial real estate transactions across the COUntry will 

come to a stop, as federally backed mortgage loans cannot legally be secured lIithoutthis critical 

protection. Failing to reauthorize the NFIP could jeopardize nearly 40,000 mortgage closings per 

month. 

We are about to enter hurricane season, and America cannot afford a lapse oflhe program. Failure 

to reauthorize the NFIP would further stress already struggling real estate markets, potentially cost 

the goyemment billions of dollars in uncompensated relief effortS, and put millions of consumers at 

risk. 
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In July 2011 , the House of Representatives passed a bi-partisan measure, H,R. 1309, by a vote of 

406-22, On September 9, 2011, the Senate Banking Commiuee unanimously approved its version of 

the 5-yeaf bill. Both proposals include a long-tenn reauthorization and imponant reforms that \\ill 

optimize the current program, make needed improvements to the flood plain mapping and appeals 

processes, and other key reforms that \\;11 enoourage program panicipation and put the NFIP back 

on the path to sound financial fOOling. 

We do bring to your altention to a provision included in Section 3 of the House-passed legislation 

dealing with cancellation offorce placed insurance when a borrower demonstrates that they have 

obtained flood insurance, Requiring cancellation of force placed insurance in such an instance is 

appropriate, but the legislation \I·ould require lenders to cancel the force placed insurance and 

refund to the borrower any fees \\;thin 30 days of notification of other insurance, Gil'en the 

realities ofpaperwolt processing and internal control compliance, we respectfully urge that this 

time frame be extended to a minimum of60 days if such a provision is considered in any final 

legislation. 

Thank you for your effons to reform and extend this imponant program, and for hearing our 

concerns. We look forward to working with you and the other members of the subcomminee as this 

process moves fcrv.ard and we encourage the full Senate toaet now to reauthorize this program and 

avoid the costly consequences that would result in a lapse from fai lure to act 
95 

PREPARED STATEMENT OF THE COUNCIL OF INSURANCE AGENTS 

AND BROKERS 


509am054.eps

S:atemenl for Ihe Record 

SenaleCommiltee on Banking, Housing and Urban Affairs 

On Reauthorizing and Mc6ernizing Ihe Nalional Flood Inwrante Program 

Onbehalfof 

The COunci of lnsurar.ceAgeftlS and Broker'S 

May 9, 2012 

The COundl of I~urante Agents ilnd Brokers is pleased to s.ubmit this statement for the re<;ord on 

moderniling and reauthorizing the Nati01al flood Ins.urance Program (NfIP). Countil members 

specialize in it wkle range of insurante products ilnd risk management !oervkes for business, industry, 

government, and Ihe p;lblic. Operating both nalionallyand inlernationally, COundl members cond uct 

business in more than 3,000 locations, empklv more than 120,000 people, and annuallv place more than 

80 percent -well over $200 bOllion -of all U.s. insurilll«' products and services proteding business, 

industry, government and the public at-I",ge, and they administer billions of dollars in emplo~ 

benefits. Since 1913, The COuncil has WIlr'o;ed in the best interests of its members, securing innovative 

solutions and creating fleW market opportunities at home and abroitd. 

Couocil members rely on Ihe NflP 10 help businesses large and small secure Hood insurarn:e coverage 

and continue moving local economies forward in areaS that face increaSingly high Hood risks. In doing 

$0, ou r members rely on a predictable flood insurance mar'o;et to which the NflP has been the bilcklxme 

for decitdes. Recent congressional inactiln to rea uthorilethe pr<l&fam res.ulted in lap~ that, despite 

congress's retroolctive reauthorilation, doomaged broker's wnlidence in the program and undefW)red 

the need for an innovative solution to cover commercial Hood risks. Allowing the program to lap!oe 

again WIluld not only cau!oe significant economic damage to struggling economies, but also to mar'o;et 

wnfidence already disturbed by pre'lioo! falters. We Iherefore stronglv support the legislation reported 

oul of the Senate flanking Commalet! laS! yea r Ihat restores predictability to the commercial flood 

insurance marketplace by reauthorizing the program for frve years and inte-grating financial reforms that 

would move the program towards more >table finandal looting. 
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AI VOU I;l\Ow, th~ N~IP is fundamenlal~bankrupt with a debt thai now ~liC.reds S18 blillon following 

natulal disasters ewel the ~st len years. In ~ddition (1) dimatevoiilnity ,lIId extreme event exposure 

that is inherent to a natural disaster as~s\<lrn;e program, the NFIP's financial disarray al>o stems from 

inslitutional issue'! that ,",Iude ewerty su~idized premium assistance, outdited flood mips, ~nd wilste 

and fraud. CouncH members therefore bl!!iev~ that, in conjunction with a long·term reaulkoriz3tion 

that pre:;erves predictability, the NFIPshouid illtegrale private m3f~et solutions that wl)uid adequi\.tely 

renore the program's flnandal integrTty. In addition 10 reduced premium assistance, theie sojutions 

should include an ~ctive role for the reinsurarn:e community that would essentiallV illuoduce the 

program to true ri~anal~ and subsequent risk spr~ding through the reimuraf1(e and Qlpitill 

markets, u~im3tely 'educinR costs totaxpaVers. An active partnefship could easilv be formed where 

market experts assist the NF(P in identifying true risks, and subsequently ieeking appropriate coverage 

in the prime reinsurance market. A model like this would not only 5<lve laxpayerdollal1, but would he 

put the program on a financially sustamab\e pain.. We look forward to w0l1o:inK with Members of 

Congress I)n !nnovatl~e ways that the private insurance market an assi5t the NFtP and til)(p~yers with 

nalural disaster anislafl:e. 

The legisla\iOll before the U.S. Sen.ale that reauthofl1es the program fOI fM! years makes critical 

<Idvances on Sl!W!ral keyiiSues that Include reduced premIum assistance ~nd substantive mapping 

reforms. Tile reforms would ultimately help restore much nt'eded broker confidence and predictability 

in the flood insurance marketplace. We urge Senate leadership 10 qulcklV pass the long·term 

reauthorIzation effort 10 ivoid another lapse and slowly moW! the program to more finandally sound 

fooling. 

We 'If!ry much app reciate the opportunity to submit IhTs5btement for the record. lIyO\l ha~eany 

qUf'5lions or wouklilke more informalion, place contact Joel )(opperud at joel.kopper!Jd@t1i1b.lIlffi 
97 

PREPARED STATEMENT OF R.J. LEHMANN, DEPUTY DIRECTOR, CENTER ON FINANCE, INSURANCE, AND REAL ESTATE, THE HEARTLAND 

INSTITUTE 


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the goals of actuarial rates, effective enforcement of mandatory purchase and floodplain 

management requirements, modernized Flood Insurance Rate Maps, and a shift toward preparing 

for extreme tail risks through the build-up of catastrophe reserves. 

However, the window to take-up the Committee's five-year NFIP reauthorization on the Senate 

floor is rapidly closing. Unless OIherwise extended by Congress, statutory authority for NFlP is 

set to expire May 31 , one day prior to the stan of the 2012 hurricane seasO!l. Though the House 

and Senate flood insurance refoon bills introduced in the IIi" Congress are more similar than in 

other ment sessions, there remain some minor differences that will need to be senled before the 

legislation can be presented to the Presiden\. We are hopeful that this process can be completed 

in an expeditious manner before the program's scheduled e,>;:piration, bUlthat will require 

immediate action on the pan of Senate leadership. 

111'Q-Year Ex/ellsiQII VerIIII I.,i//tg-l'erm Reform 

The Federal Emergency Management Agency, which is responsible for administering NFlP, 

recently endorsed a plan for Congress to pass a two-year reauthorization ofNFIP under its 

current structure, to grant additional time for debate on long-term changes to the program and to 

provide the hoosing market \\oith additional cenainty of the program's continuation over the near 

term. We are sympathetic to FE11A's concerns about the disruption that another lapse in NFIP 

authorization could cause. Since its last long-term authorization expired in September 2008, 

NFIP has been e,>;:tended withoot any changes through a series of 12 short-term reauthorizations. 

It also has lapsed several times during that period due to congressional inaction, including four 

lapses for a total of 53 days in 2010 alone. 

But we disagree strongly with FEMA that a two-year extension, which would push the reform 

debate into the 113'" Congress, is desirable at this time. NFlP is nOl sustainable for an additional 

two years as it is currently constituted. The U.S Government Accountability Office placed NFlP 

on its list of high-risk federal programs in March 2006, and it has remained there in each 

2 
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successive year.2 The program is $17. 77S billion in debt and can borrow only $3 billion more 

from the U.S. Treasury under its currently authorized borrowing authority, Given its debt load, 

NFIP continues to accrue nearly SI billion in interest annually and the Congressional Budget 

Office projected in October 2011 that its current borrowing authority likely will be exhausted by 

or before 201 4.

3 

Extending NFlP for an additional two years with no major changes would create a strong 

possibility that FEMA will either need to return to Congress to seek additional borrowing power 

or that the program will become insolvent. Political concerns could jeopardize congressional 

attempts to authorize additional debt for an already heavily indebted, high-risk program, while 

insolvency would be even more destabilizing to housing markets, given that the program is relied 

upon by 5.6 million policyholders with $1.25 trillion of coverage in-force. In order to ensure the 

program is placed on more sound fiscal footing, it is imperative that Congress approve a longterm reauthorization that includes significant refOTms, 

NFlP Debt alld BorrowillgAlllhorilY 

For much of its history, the National Flood Insurance Program has been able to pay claims out of 

its operating revenues, and the program had no debt at all at the end of the 2004 Fiscal Year. In 

the ensuing nearly eight years, it has borrowed $19.6 billion from the U.S. Treasury, and repaid 

less than 10 percent of that total,~ Following record losses stemming from the 2005 hurricane 

season, Congress voted three times between September 2005 and March 2006 to raise the cap on 

FEMA's authority to borrow money from the U.S, Treasury, previously just $1 .0 billion, until it 

ultimately reached its current level of 520, 775 billion. 

Catastrophic 1100d loss events have driven the program's growing debt over this period. In fact, 

NFIP has paid out more in claims than it rKeived in policyholder premiums in three of the past 

I 

" ti I , 

J 
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509am059.eps

eight calendar years. In 2004, NFIP collected $2.04 billion in premiums and made $2.23 billion 

of payments to policyholders; in 2005, it collected $2.24 billion in premiums and made $17.71 

billion of payments to policyholders; and in 2008, it collected $3.07 billion in premiums and 

made $3.45 billion of payments to policyholders. 

Even in years in which the program's pure loss ratio has been less than 100 percent, it incurs 

significant administrative costs through its Write Your Own program, under which private 

insurers are paid to market NFIP policies and adjust claims following a loss event. The GAO 

estimates that payments to WYO insurers, which are based on payment methodologies 

established in 1983, typically consume between one-third and two-thirds of the program's annual 

premiums.

5 

The program 's string of record losses began with Hurricane Ivan in 2004, which prompted $1 ,58 

biliiOll in flood insuTlmce claims. Claims from the 2005 hurricane season, the bulk of which were 

paid in Fiscal Year 2006, included the largest single loss event in NFIP history, $16, 17 billion 

for Hurricane Katrina. NFlP also paid out $470.7 million in losses from Hurricane Rita and 

$363.8 miliiOll oflosses from Hurricane Wilma. 

Since 2005, the program has been hit funher by floods in Pennsylvania, New York, and New 

Jemy in June 2006 that caused $227.5 miliiOll in losses; an April 2007 Nor'Easter that produced 

$225.6 miliiOll in losses; and the strike of Hurricane Ike in September 2008, which produced 

$2.63 billion in losses, the second-largest flood loss event in U.S. history. The program was 

spared comparably large losses from significant floods in the Midwest in 2008 and in New 

England in 2010 largely because take-up in those regions was relatively low. 

Imp/fmflllillg AC/lIllrilil Rnles alld Estllblishillg Catllstrophe Reserl'f!S 

Based on CBO's most recent projections, given annual interest payments of 5900 million and 

annual premiums of roughly $ll billion, it is unlikely that NFIP will be able to repay its debt 

S United Stales (jm'CflUllCll Accountability Office. NATIONAL FLOOD INSURANCE PROORAM' 

FEMA 's ManagcmcnJ aN Q,crsigh] of pa\'l!!Cn!s fQr Insurance COllWI1I' &,,;ce5 SOOuld Be ImpfOloo. 

(Washington: GPO, 2(01) 

4 
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within the next dlXade. Even in Fiscal Years 2010 and 2011, when claims were significantly 

lower than premiums, the program was able to pay down just $500 million and $750 million of 

debt, resp!Xtively. While the refonns proposed in S. 1940 and H.R. 1309 do not solve this 

problem, they do make significant contributions toward moving the program in a fiscally sound 

direction and mitigate against the risk that NFIP's financial condition will deteriorate even 

further. 

Since the introduction of Flood Insurance Rate Maps in the early-to-mid 1970s, NFIP has 

maintained two separate sets of rate-paying customers. For those whose properties were built 

after completion of a community's rate map, the program charges full actuarially indicated rates. 

But for those who own properties which predate rate maps, estimated to be roughly 20 percent of 

all NFlP policyholders, the program charges subsidized rates that FEMA estimates are only 3S 

percent to 45 percent of the full-risk cost. NFlP also experiences disproportionate losses from socalled "repetitive loss properties." Al!hough estimated 10 constitute just 1 percent of the total 

policies in-force. RLPs have accounted for more than one-third of all claims paid. Moreover, 

FEMA estimates that roughly 90 percent of RLPs are pre-FIRM properties that pay subsidized 

premIUms. 

Under both S. 1940 and H.R. 1309, subsidized premium rates would be phased out for all severe 

repetitive loss properties, slXond homes and vacation homes, commercial properties, and any 

property that has suffered damage exceeding 50 percent of its fair mar1o:et value or that has 

undergone improvements of more than 30 percent of its fair mar1o:et value. The Senate bill would 

raise the maximum risk premium increase for these properties from the current 10 percent to 15 

percent, while the House bill would raise the maxintum increase to 20 percent. The Senate bill 

also schedules a three-year phase-in ofNFlP premiums for properties newly included in Special 

Flood Hazard Areas due to rate map revisions, while the House bill calls for a five-year phase-in. 

ACCQrding to CBO's projections, implementation of the Senate bill's provisions for phasing out 

subsidized premiums would increase federal revenues by $4.565 billion over the next decade. 

forming the bulk of a projected $4.665 increase in NFIP's net income. This would nOl resolve the 

program's fiscal problems, but it would mark a significant tum toward sustainability. 

5 
102 


509am061.eps

In addition to phasing out subsidized premiums for many pre-FIRM policies, S. 1940 also 

projects to raise $775 million over the next decade through additional premiums that would be 

charged to capitalize a reserve fund. Unlike private insurers, which charge rates that are designed 

to build a capital surplus and which typically cede risks of catastrophic losses to reinsurers, NFlP 

operates strictly on a cash-flow basis, and borrows money to cover e."penses in years of extreme 

loss. 

The Senate bill would begin to change this structure, first by charging premiums to capitalize a 

reserve fund and also by granting FEMA statutory authority to explore the use of private 

reinsurance and alternative risk transfer mechanisms such as catastrophe bonds to limit its 

e.xposure to catastrophic flood events. Taking these actions would not only better protect 

taxpayers from being forced to foot the bill for 1100d risks, but would encourage greater private 

sector participation in the flood insurance market, which could eventually set the stage for 

privatizing part or all of NFIP's operations. Reinsurers and catastrophe bonds already provide 

private sector capacity for flood risks in many other nations where such risks are privately 

insured. 

Conelusion 

In 1966. when Congress was initially deliberating on what would become the National Flood 

Insurance Program, the Presidential Task Force on Federal Flood Control Policy warned that 

creating a federal program thaI provided ~insurance in which premiums are not proportionate to 

risk would be to invite economic waste of great magnitude. ~6 That prediction has, unfortunately, 

come to pass. 

Over much of its history. the National Flood Insurance Program has subsidized irresponsible 

floodplain development at taxpa)'ers' expense. Today. more than half of the US. population 

i United StaicsTask Fom: on Federal Ftood Coruml PO~", . A UniflCd National Progrum for Managing flood ~ (Washington: GPO. (966) 

6 
103 


509am062.eps

lives in coastal watffihed and river floodplainsl lndeed, according to NFlP's own statistics, 90 

percent of all presidentially declared national disasters in the United States involve flooding. 

The federal government should not encourage the choice to live in harm's way, nor should it 

subsidize development in environmentally sensitive I'r-etlands and floodplains. The National 

Flood Insurance Program needs significant reform today_ 

Respectfully Submilled, 

R.), Lehmann 

Deputy Director, The Heartland Institute Center on Finance, Insurance, and Real Estate 

Managing Editor, OutOfTheStormNews_com 

rlehmann@heartland.org 

, United States Commission on Ocean Policy, An Ocean Blueprim for the 21st ee.-Uf". (Wasbinglon: GPO, 2(04) 

7 
104 

LETTER SUBMITTED BY BILL CHENEY, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, CREDIT UNION NATIONAL ASSOCIATION 


509am063.eps

R 

CUNA 

___ 601-.o-kt-lIW _~_6OII 11......"CIt_·MI I ,....,10"*""111 ,.., /IIl11fJ1M 

I 

.... -00 .... 

-.~ \t~y Q, lOt! 

The HonOflible Joo T tiler 

ClII.irman 

Subcommittee 00 EcollOm;: Polic ~ 

Comminee-on Banking. HCuSIng. and 

Uman AtTairs 

United States Senale 

\\'ashingtO!l, DC"20SIO 

The Honcnble David Viner 

RankingMembtJ 

Subcommitlee on Economic Policy 

Comminee 01\ Bank'ns.IIO\1~n!!- and 

Urban A !TalI'S 

Unitt<! Stales Senate 

Washingllll, DC 20510 

On i1ehaJfoflhe Credit Union National AS5OCiauoo (CUNA11 am wntin!! regarding 

Inc nearing today on the Ki!tiOO.Ji Flood InsurJ.nce Prognm (NFIP) The Netd for 

Long-Term R~aulllOrizatiOl and Refoon. (UNA is the largest credit union adl<xaq 

IlIgaoiutioo in the Unitrd Sla~. reprtst'liling nearl)' 90'!~ of America '5 7)00 state 

and ffdmJl), chartered crajil unions and tlltlrQS million meml>ers We app{t<:iate!he 

opportunity 10 >bareoor ,iews reprding this is>ue 

As you blow, the National Flood Insurance Progmn (NFIP). admini.lrereJ by the 

Federal Em~eocy Managtmenl Agtfll:y (FE~IA), was established in 1968 Prior to 

its e-;isteoce, many homo.:r;.!IefS, !tIlltrS, and bllSinesses were unable to in;ure ~mSl 

flood losses becllllse privalt insurers did nol offer slICh coverage or because il WiS 

unaffoo!abl~ Hood insurarc~ i! requirtd by law in flood zone areas lhal are 

desi~aled by i/1e rtOO1Uy ~pdtlcd FEM" m3j)S and thusa necessary purchase b~ 

pru!peclivt homeowners bnore "edil unions can uffn- mOl1gagcs and 0I1ltr related 

j1rOducu to humebuym 

PffViOO5lap5e5 in NFIP aulhorizariOll hale caused signilicam disrupliOll in the 

mOl1!!3gc unrler" .. riting process fl)l" Ihoosands of prmpeClile homeowners With the 

~'5 authoriuuOl1 settO ~pirealtheend of this month, it j, uIXtotlh31 

Congress c~ end lhe auihomy of this crucial pr~m or pus comprehen>t1e reform 

last year, the House of ~resent:nil'es aoo tI1e Senate Banking COIt1minee passed 

tive-yeal reauthorinrion bilts. We >UppoIl I pJ'Ollisioo COfItained in Iht Hoose-passed 

bill (H R 1309) lIut codifies the existil1,!o; practiet tI1at allows a lender orstIVicer to 

chaJxe the OmOl'tI for lherosl of premiums and fees inrurred by the lendrr or 

sm'icer in cases when' a lxwTower who is required 10 have flood insurance either 

cancets Of leiS the requirtd policy lapse and then fails 10 ptlrchase flood in.lurance 

",thin 45 day' after nolificl\ion oflhe lapse 

-.,' .... ---_ ...... --
105 


509am064.eps

The Honorable Jon Tester 

The Honorable Oal'id Viner 

May 9, 2012 

Page Two 

The House-passed provisioo simply remol'es any ambiguity and clarifies that in such 

cases the lender or servicer may charge the borrower for the premiums or fees incurred 

for coverage beginning 00 the date on which flood insurance coverage lapsed or did 

not provide a sufficient coverage amount. We urge the Senate to include this 

common-sense language in any bill flood insurance bill it con>iders, 

On behalfof America's credit unioos and their 95 mill ioo members, we eJ1courage the 

SeJ1ate to reauthorize the Na~ooal Flood Insurance Program before its authorizatioo 

lapses, Thank you for your consideratioo of our I'iews, 

Best regards, 

Bill Cheney 

President & CEO 
106 

LETTER SUBMITTED BY JAMES W. TOBIN III, SENIOR VICE PRESIDENT 

AND CHIEF LOBBYIST, NATIONAL ASSOCIATION OF HOME BUILDERS 


509am065.eps

--. 

NAHB. 

120115t)SlrlllhYi 

-"''''' 

T8.ll:JE8~4? 

F20HIl68m 

-"" .. Milti,2012 

n,. Ho/>OI3t1e Jo/IIt&IS' 

""'"'" SUl>:ommo(Iet 001 E~cPcKlJ' 

CoIMIitlH on iIIriIllg., ~, 0IId u,ca. Maors US S\mSSen~ 

~,DC2IY.il0 

Go.omm~nt Alfows 

j~WTOIjolI 

s.- ~ ,,_ & C~ l<:UlfIU. 

On DeNiI oI1M 1010 000_ fltI'Ie IIIOOrIaI A!IooIllOll oIHoIM BIIICIets (twill), I.", ~ 

100I'I III prCtIat IWt8 S~:S IIgIIIing ~ Nne..! Flood kIInnce Pr~ (t.fIPI WII'*! ~ 1M «II""I.rtH tor todreumOIM r.e<dfot rNWIOi1ZIng 1!I(j~!III Nl'IP 

FVsI. NAHe strongy ~1\le~~oItMlfRPfOI".~ I'4 Y(\llknrlw.1III1,\Iy31 

2012, rl(ti(Mofl dt«lM .. ~'OOfOllheliit Sfl'lItll61!1 !he hflp hfs~ I,.ries 01 

OIlOI1-<t1'" f);t_ trt.I n"f~ I rQlioMI II ~ In I'It I"OOIlI" ""tac&eQ_ ~ror(NIna~ .. eIrtIl\'~1\OUq1lllMl <tJMg1PIIS0/IIt~ 

.--PfIIOO'. mil'!!' MneboJ1f!'11~deI.,.eoOl ta~t<l 0:l0I<'91 0Jt lOIN NtlIIt) to otUin~OOdlntwlnttblllOlf"'Ol1NH In""" ___ WIdto,,,,,,IoImlOllOIIOI oaJj 

~\I1.IQIOn""_IIil_ouetolllt~oIlIoocI~_~Il-mog "",~dt\Ij,,1'IC 

..... 

tWiB sal hal rooctrIlS \11th Wjn 1oS!ledi 01 1M SerIt'.e til, mo!l!11l1it1\'!IIt "'_or; I)I.iIdaIe 

Iiq.l t!lle<1!!.IO/ItID$e~_""" ...... t" .. 1W18111<"'~,*,_U'IJ!IoeJI "",'_III ~ 8oo:I __ 111k81 IIII\l ootOIIM 1M Ilfks iWIOI,..UOIir>gthoH VI"o d'IooM to ~ 

_0 l!>oI;o $IIUCll/ttlIO ~1ODCl ",WOI)OIIII, ., 10<1 • (""" 01 doutI. ~ 

OJttentf)', one""~ ~or\llf IFJ!>rs trIe.tJIny 01 ___ • '~IM 1W51iI~ oltne 

feOtlll ~ kI desIgr!, ~!IiIII, ~ "'ll/Wliood ~ 1~U1ff t(f!llt ~_ 01 

r_1lg IlR ~ _1 rr.t_ ,~. Q/IlC1,", 1_ baIIM <IlI:)lOlifvMl ~ ~ 

Pl«taIOIlla ~ lQG.yHlloodpljjj~ lit r;;( r!Olllieo;j 10 ~ Iood I~e Th'IIII!ll:enflfO 

ndt~ lo .. ~Ior~~lllIoodcootr., _+oc3Itd btI..o_aIIIIrM 

lit '"'!IO'<'f'l_tI'Ie Flood Inu""", Rile ""'po (fIRMII) 

""Irt/orII'Js~~oIN~_Sitt>ere6lderitesPld!lNeIlfIII!ldIlory 

PII~Jtq\II!~'~~_'NlaI'IG ~ eq.e,.illWJlattr)elll_ ,"_tJll'O'I'IfC 

"grel!dnlgI""IM*""I"II'IOrI!'\'_iII'Itttt<!hlJlI'\l'II:Sf~Jood 

prQttaIOnl. _~, 1)104 ill ""'t!wlnll tIM,""." .. , .. "-..... ~ MQIoIIl'ClIO Il<f<lIKI 

W\$Ufance,bt~ .. JoI_ ...... """ ... t!TOf!S 1~~tldliorl.lMltloc;llibeoo;/'\a rgo ~~ff'fM 

00 IfOPMl' 1 .... ,0 ,_lor 0P0l1tlOO aNI rn,"-..;e gI thll_, CIII/?"II1ot 1<>DIIi<aur ... 

~ .. i>dIltmwl"""",, 

tWIB \OWId Ike III ~irt lMHOOotnmCee lot 1oQI~~ 10 iI(I!Jom!he ~for NFlP ~noo 

.-dtoflltliljtr.QdyIltl*",illtI'O!1"'" How!trI'tf a.IONOOPItt/fIS.IWf8'1lm01 ~'"" 

$enOlf billrI. ClJPren! b:!lI t.Alfl oppreoates Ii', opp:>IIUI!iIy to prooidtl'lp<j1 00 tilt ~~ MIll \lIOI<I !orv<I,. 10"'" _ (d0lla_. "'" OMIt to __ Nf\P fe/ofm 
107 

LETTER SUBMITTED BY FRANKLIN W. NUTTER, PRESIDENT, 

REINSURANCE ASSOCIATION OF AMERICA 


509am066.eps

May9,2012 

The Honorable Jon Tesler 

Chairman 

Suoconlnlineeoo ECOIlIlInic Policy 

Conlm;ltee 011 Banking, Housing, and Urban "IYail'S 

United Slates Senale 

534 Dirkseo Senate Office Building 

Washin~lon, DC 20510 

The Honorable David Viner 

Rankin~ Member 

Subwmminee on Economic PoIiey 

Comminee on Banking, HOIJsing. IIld Urban Affnirs 

Ullited Stales Senale 

534 Dirksen Senate Office Building 

Wa>hington, DC 20510 

Ikar (bainnan Tester and Ranking Member Viller 

Tbe Reinsurance Associarion of I\merica (RAA) is pleas«! to pr()\!id~ comments for the rteord 

for the May 9, 2012 COlliluitlee on Banking, Hoo~ng, and Urban Affairs Subrornminee on 

F..conomic Poli cy hearing cotided "The National Flood Insurance Program The Need for LongTerm Reauthorization and Refonn~ The RAA is a natiooal trade a!OOciation n:presenting 

rtinsurance companies doing bu!.in~s In we United States 

The RAA strongly support! the "'Flood Insurance Reronn and ModemizaliOO A~1 of 2011 ~ 

(S,I940~ which tlle_ Commiuee on Ba.1king, Housing, 9Ild Urban Affain. on September 8, 1011 

\'01ed to report to the Senate_ The legi!Jation provides a long-term reauthorization of the 

National flood InsuraDr.! Program (NfIP) and includes desperately needed substantive reforms 

to ensure the Program can continue 10 pM'ide needed llood ;Ilsuf<mce co,ernge to Ilm~eown~rs 

li~ins in flood-prone region>, while at the same time prott'Cting U,S, taxpayers 

The RAA supports mallY of we provisions included in S IQ40, but our letter today fOCliliCS on 

Se\:tion 136 relating to the role reinstlnmce may play Illletuming the NFIP 10 a fiscally sound 

and sustainable program RAA belie',ts the NflP can address its volatility and extreme e~e01 

..-xPOi'llfC and reduce the dcpeodem:c ri we ProWOlm on la~payers and Federal debt tbr<lllgh risk 

U1\I1sfer \{I reinsurance and capital market providers Both markets hal'e signilicant capacity and 

an appetite 10 assume flood risk. 

Reinsurance is critical to insurers and slatMased propeny insuranct' programs to manage_the 

COSt of naturnl C6ta5tfOJlhe risk, and similar C()5t management and risk sharing ~an be Bchieo.'td 
108 


509am067.eps

through the NFli' Section 136 of S.1940 makes il dear the Federal Emergenc), Management 

Ageucy (FE!l.1A) Director ha~ Ihe authority 10 utilize private reinsuranu to minimize the burden 

OIl American taxpaye-rs. RAA also supports provisions that dirett FEMA to report \0 Congress an 

asses~ment of the capacity and pricing of the pri~ate reinsurance, capital markets. and financial 

marketS by requesting proposals from those marilets to assume 8 portion of the Program's risk. 

This will allow NFlP to II'Nk with modelers, underwriters andlor brokers to provide the market 

with an evaluation of its risk poofolio. deteonine what types of risk in the NFIP are amenable to 

risk transfer and then if they choose to, find and seaJfe coverage i/1 the private sector 

Importantly, the legislation would also allow FEMA to develop a protocol for Ihe release of 

NFII' data to (he private sector that includes adequate privacy prOlections S!J that an adequate risk 

aMSSflltnl can beconducted in dcvcloping the-se proposals. 

The process described above would also allow the private sector to evaluate NFlP data and 

conduct their own risk assessment Most importantly, this provisioo helps pave the way for 

NFLP \0 unnsfer catastrophe risk from taxpayers and tbe Treasury to the pri\'Bte market Sbould 

Ihe NFIP find the hid.~ unanractivc 00 8 price or coverage ba~i~, it would not go forward wiTh The 

placement and the NFIP would be in The same place it is now: dependent on public debt If the 

ac~menlS were succ~ssful , the pTiI'ate sector would be in a position to provide flllanciaJ relief 

10 la~paye-rs 

The RAA applauds your commitment to rcfooning the NFIP and we encourage (he full S~nate to 

consider and pass the Commiuee-passed bill to reform the Program. We look foswsrd 10 

cootinuing \(I \\Or!; wi th roo on this critical issue and IRllling the NFlP on ~ sustainable fiscal 

path. 

Sincerely. 

Franklin W, Nuuer 

President 
109 

LETTER SUBMITTED BY SMARTERSAFER 


509am068.eps

SMARTERSAFER.org 

\ ... ~ .... , ...... " ......... , ." ... ,...,,,,,,, 

May9, 2011 

The. Honorable 1011 Tester 

Chair 

Economic Policy Suhccmmittee 

Senate Banking Comminee 

534 Dirksen SCII41C omC( Building 

WashiD!!1on DC, 2(1510 

Dear Senators Tester and Ville!" 

The HooorableDavid Viner 

Ranking Member 

Ecooomic PoIicy Subcommittee 

Senate BankingCommillCt 

514 Dirksen Senate Office Building 

WashingtOn, DC 20510 

As a diverse coalition of a~payer adl'OCSle5, et1\"ironmenlal organizations. insuran<:e indus\!)' interests, 

boosing groups and OIhers, we thank yoo for yooreITons to reauthorize and reform the NauOIlal Flood 

Il\MIran~ Program (NF1P) Thehearing }'OO are holding today is a positive step to gem"g the full 

Senate to consider and pass the Banking Committee-passed bill to reform NF1P, which a5 you know is in 

need of serious reform. The program is currently almas! SIS billiOl1 in doot to federal a.~payers and 1bat 

amwn! is likely!O inrn:a;c ifreforrns loth~ program are nOl impltmenled Wilh001 significant reform, 

the NF1P lI'ili nOl besuslainable aJld American tupayen lIill continue 10 be asked to bailoot the 

program tim~!II1d time again 

The Senate Banking Commiuee has already on!ll1imoosly reponed out a bill that makes. numberof 

~ reforms to pili the flood insurance program on 500nd financial fOOling and tile Housepas500 

NFIP reform with over 400 VOles, The bill will phase out risky, onll arrant~d subsidies that have 

undermined the fmancial 51ability oftne ptogram. ",ill allow NFIP to purchase reinsurance to help NFIP 

pay fUlllre claims IIhile protecting taxpa}'ers from these OIhel'\\ise inevitable costs: will require FEMA 

10 enswe maps are updated and accurate 50 that people unde~tand and can better prepare for thtir risks. 

and will 5Ire!mline and strengthen mitigation progl<lms to help de\;rtaSe flood risks and sWlglhcn 

flood~~po!ed COO1munities. homes. and b~sinesses, 

The Banking COOlmin« has taken a needed step to reforming the nation's flood insurance progrnm and 

Smaner Safer joins a [lnge of stakeflolder VOUI'S in appla uding this legislation We urge the full Senate 

to quickly pass this needed reform 10 NFlP so thAt th~ Hoo~eand Smale can Ilegin to resolve the 

differences and quickly get I bill to we I're!ident's desk. 

We look forward to liming lIith)'OII on this issue and thank yoo forall of)oor elTon, t(l pi15S this 

criticallegislalion 

Sincerely, 

SmanerSafer 
110 


509am069.eps

SMARTERSAFER.org 

I."",.." r ....... " ' '' .... I. ' ........ , 1,'." 

En~ ronm~ntal Organizations 

American Ri,-crs 

Ceres 

Clean Air-Cool Plane! 

Defenders of Wildlife 

En,ironmcnt.:ll Defense Fund 

National Wildlife Federatl()ll 

Republicans for Enl'irOl\lllCnlJ1 Pro\CCtiOll 

Si~rr.l Club 

Consomer and Tupa)"er Ad,ocatts 

American Cooservalive Union 

Amencan Consumer Inshtute 

Comp.:litll'c Enlerprisc nsljtUl~ 

Taxpa)'crs fOf Common Sense 

InSU Rf Interests 

Alhanzof America 

Association of Benuuda Insurers and Reinsurers 

Chubb 

Libcn) Mutual Group 

National Associallon of Mutuallnsurnncc Comp3!lies 

Reinsurance Aswclalioo of America 

Swiss Rc 

USAA 

lIuusing 

Nauonal Loll' loconlC Housing CoalitIOn 

Natiollal Leased Housing ASl<)(;lalIQII 
111 

LETTER SUBMITTED BY JAMES BRADLEY, SENIOR DIRECTOR OF 

GOVERNMENT RELATIONS, AMERICAN RIVERS 


509am070.eps

The HooOl'1ble Joo T (SleJ 

Chairman. Subcomminec on EeolOlllic Policy 

Uniled SI.,ts Senale 

Washio8100, DC 20510 

The Hooorabit ()avid Viurr 

RankingMembe-r, SuocOl1lJl1inceoo Econooltc Policy 

Voiled Stales Senale 

WilShinglOll. DC 20510 

O~ar Chairman Tesler and Rlnkirg Member Viner 

_ A,n.n" •• Rivers 

wtl'CtS" (plltecrus 

On behalf of American Riven' m~mbrnand supponers 3eHlS! the n31ion.lll'rile in 

support ors l~O. LIIe Flood 1Jm.rnl~ Reform and M()demizaiion ,\ct. Thank you fOf 

IIoIding I hearing 10 rai~ awarelltSS of the CTiiicall\ffi! for long term extension and 

rMoons of the Naliooal Flood Insurance Program (NFIPj 

Am~can Ril"m is the leading cm>m'lltioo ~zatiOl\ wornng 10 pmlect and re:stort 

the natioo'i rivers and streams \\'e .... ro. loprest!w our·n~lufll defenst5· -our 

wetlands, ri"er5, noodplaiJlJ, and upland and coastal areas -10 saf~ rommuOIllts 

and the environment Pror«ting II1d restoring floodplains allows room for rivers to safdy 

IGCl)Illmodate flood wBter, makes (;()Il1muniiies more rfSilient to floods and Il'du.:es the 

financial Impact Q/'f100d reI:(l\eI') OIl communities and the federal go~emmenL 

RefCl!!Jl is NtsC$SID 

The t.'FIP wu intended 10 be a 1001 10 manage lhe Na~oo 's nood risk and reduC<' nood 

10S5<:S While the program h~s helped Americ-ans fioancially recover from dt",'a,lating 

noods for over four decade!, il has a numb-er of !iIloncomings thal ertcourage 

de"dopmenl in thenoodplain. w~le laxpayer money, Bnd make communities moo: 

vul~l~ 10 noods. Th~ weakaesses, coopled \lith natural eatastropht$like Hutrictne 

Katrina. ha\'e rtsulted in fiS(:a1 imolveroey and a debl of almost S 18 billion 10 the 

Treasury 

American Ri ven supportS long leTn tension paired With several crilical reforms 10 lile 

NffP tMI art included in S. 194(1, the Flood Insurance RefOOl1 and Modernizarioo A~1, 

Forlhc proyarn toba:ome linancially sustainable arullo improve prOlwioo ofl100dprooe comnwniti~ Ind the noodplain. any long-teml e.1It11~ion mUil include.: 
112 


509am071.eps

Improvements to FEMA's flood mitigation programs that ... ill racilitate moving 

flood -prone propenies COt ofharm's "a)' These programs eliminate a nnancial 

oordeo front the ta~payers and help ftStClft floodplains 

Improvement. to FEMA's flood mapping program that will imprm ~ thearnJraty 

ofnood maps and eommunicarioo Qrnood risk IOcommunities and homeownm 

Reooblishing the Ttclmkal ~'apping Adl-isory COO/lcil "ill result in flood ma~ 

that more acclIrately reflect tile flood risks associated wi th sea level rise, climate 

change, lind fUlure dtl'elopmenl 

A phase out ofl1oOO insurance sub>idies that area finautial burden 011 the 

la~payef IIOd have pe!peluated developml.'llt In the floodplain. Theb;11 would 

phase oot subsidies for ceruin propenies including vac~tiOl1 homes. properties 

that flood repealedly, iIIld properties that have been 5lIDotantially updated. 

levee, and Residual Ri,k 

Tllecomml1nicatiOll offlood ri!~ i~ ~ villlily jmpon~nt roltoflh~ NFIP th~t empowers 

communities and homoolll1ers to make de.;isions about how to k~p theirfalnily and 

property safe during a nood American RiVe« believes the federal gtlI'trnmem has ~ 

moral and financial respoosibilit;' to communicate flood risk 10 all citizett5, both in 

unprotected areas Md behind le\'etS and below dams 

The presenc~ ofa levee does nill guarantee protection from all tl00ds lClt'e$!Ift 

constructed to a cmain level, such as the OO-year flood", and tan beoyenopped by a 

larger flood or fail if not maintained le-."ee failures can be catastrophic for the properties 

behind them and disturbingly, many people have!l!l idea th~ live behind a levee. For 

tbis reason residual risk areas behind lewes and bel(w' dams should be mapped, the risk 

should be communicated to property O\\nm, and development standards and Hood 

insurance shoold be required tfchanges to residual risk sections afS 1940 are made as 

the bill jlfOCttds, American Rjlt'fS encourages the Sl.'IIate to maintain requirements to 

map ri!sidual risk lfeasandcommunic31e tht risl to the public 

Thank you for hoidinglUlolher htaringOllthis imponam iWl(" Wr encourage the Sen.alt 

to pass S 1940 as sooo as poslible 

Since/elv, 

James Bradley 

Senior Dirtetor ofGol-emmenl Relations 

American Kivers 
113 

FIRM MAP AND NOTICE SUBMITTED FOR THE RECORD 


509am072.eps

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509am073.eps

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115 


509am074.eps

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1,1,1,101 .. 1 .. 1011"".1.1,1"1 .. 1,111,,,1,,.1,,11,,1.1,,1,1 ,1 

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01 .. "'"~1.Ij "'.'1' to_IN ........ _.one Y'>llmiI'" "--. ca'*'i' .e""'*' _ ....... I"'.JII<t.""'OIChe.oI-.:<..,"' ..... yaoollo ....... Ol....,..tInIe .. _W ...... IS ,000od __ ..... .onc •. 

Keepjnl your b\I.inul protected means keepinr; your doo.- open . 

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............. ...-_ ..... _.~.d .. _._N"'>!.oI-.. ... l)11>1 ..... I~$' .. ~clMecIbo ......... ..,. ..... ' ....... , 1IICI._Du ...... cNd"" .. I..,. .. 

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Il costs I little to protect a 101. 

1112010, .... _. ", ........ ,.., _doom ..... ,....,. 566,000, \'II, tor ......... SIf>2. yt •• 

QIIOII/oedbu ..... '_.CMlplS50,OOOolc.-s""""'_._'Y'>II_lI,cc ....... .. -.. """"""II" is not ...... ..-. ~'.QUII. atl","""'" ...... , So .... ~. obI ...... IIOHM, 

\'1M ........... can to l t>OCk ,,"~'!ef:I.~ 

Owning a small busilleu C;ln come with big nslc •. 0...;.,... bod """" ,,,, •• ,,.,.,.., ..... _)'0\11 _ .• .-...,.,.,.. _.,.,.. ............ _ record> ..... ,.. 0111,. _Ior~, inial'" ~ 10 'ePIc" .. oIltIOI OII_ ""'"'. __ ... -.c~c_"", ~PII!.,.,.. "" ...... " !OO~ .. II. "'_ ... po<e<I. 

Only flood insurance cov ..... flood •. P,0ltCI_ bIMiO»1<IdaI'. IO .... <I\aM!. I0o<I ~ < .. _"' ..... '" """01 .... __ IS __ .lo .... n_. __ ""' __ .,...._ .. roIO_llow'tIo ...... •· 

10 .... 0\II<f iIgtfIIs, col 1888-12%791 

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p.s. TIIHt's~. 3I)do\IlNII>'III P«""'''' ......... om"'*"" ... )1011_ ....,.. _'-'<. ~ .... b< 100 lite. _IS"" .. ",lollf\ll<!Cl __ S. 

Trll_ 

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406-121 «l'>O 

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For other a,enlsln your 1I.n, visit FloodSmllrt.lov,lbusin&ss 

Of call 1·888·724'6791. 

~FEMA