Capital Corner
By Will Melofchik – NCOIL General Counsel
Welcome to the latest installment of Capital Corner, a column that aims to update you on some of the issues that NCOIL is following. Below are updates on some issues that were recently discussed at the NCOIL Summer National Meeting.
Coming Soon – Risk Rating 2.0: Equity in Action
During the recent NCOIL Summer National Meeting in Boston, MA, the NCOIL Joint State-Federal Relations & International Insurance Issues Committee heard from Tony Hake, Director of National Flood Insurance Program (NFIP) Transformation, regarding updates to the NFIP’s pricing methodology called “Risk Rating 2.0: Equity in Action.”
As you may know, the NFIP, administered by The Federal Emergency Management Agency (FEMA), is the primary source of flood insurance coverage for residential properties in the United States, with more than five million policies in 22,500 communities in 56 states and jurisdictions. The program, long troubled by financial difficulties, collects about $4.6 billion in annual revenue from policyholders’ premiums, fees and surcharges, but provides over $1.3 trillion in coverage.
Risk Rating 2.0 represents the biggest change to the way the NFIP calculates flood insurance premiums since its inception, with premium rates for new NFIP policyholders scheduled to go into effect on October 1, 2021, and rates for existing NFIP policyholders are to take effect on April 1, 2022.
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