{"id":355,"date":"2024-01-30T22:29:24","date_gmt":"2024-01-30T23:29:24","guid":{"rendered":"http:\/\/cherishedmemoriesstudios.com\/?p=355"},"modified":"2024-05-01T16:29:51","modified_gmt":"2024-05-01T16:29:51","slug":"fema-reauthorization-session-highlights-importance-of-risk-transfer-and-reduction","status":"publish","type":"post","link":"http:\/\/cherishedmemoriesstudios.com\/index.php\/2024\/01\/30\/fema-reauthorization-session-highlights-importance-of-risk-transfer-and-reduction\/","title":{"rendered":"FEMA Reauthorization Session Highlights Importance of Risk Transfer and Reduction"},"content":{"rendered":"<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/insuranceindustryblog.iii.org\/wp-content\/uploads\/2019\/03\/NYC-Sandy.jpg\"><img loading=\"lazy\" width=\"1024\" height=\"678\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" alt=\"\" class=\"wp-image-7087 lazyload\" data-src=\"http:\/\/cherishedmemoriesstudios.com\/wp-content\/uploads\/2024\/01\/NYC-Sandy-1024x678-1.jpg\"><\/a><\/figure>\n<\/p>\n<p>If there was a recurring theme in last week\u2019s Senate Banking Committee <a href=\"https:\/\/www.banking.senate.gov\/hearings\/reauthorization-of-the-national-flood-insurance-program-local-perspectives-on-challenges-and-solutions\">hearing on reauthorization<\/a> of FEMA\u2019s <a href=\"https:\/\/www.floodsmart.gov\/get-flood-insurance?gclid=Cj0KCQiA2eKtBhDcARIsAEGTG40oWbuOz2FDCDTfZG5spULV9hP1a-IUzRG5jla4vTwlDDYePyWmpO8aAs3_EALw_wcB&amp;gclsrc=aw.ds\">National Flood Insurance Program<\/a> (NFIP), it was the need for:<\/p>\n<ul>\n<li>Congress to reauthorize NFIP, and<\/li>\n<li>Communities, businesses, and government at all levels to invest in mitigating flood risk and in improving resilience.<\/li>\n<\/ul>\n<p>It\u2019s important to amplify this message, especially in light of a recent <a href=\"https:\/\/insuranceindustryblog.iii.org\/federal-reinsurance-proposal-raises-red-flags\/\">proposal by Rep. Adam Schiff<\/a> that would, among other things, disband NFIP and require property\/casualty insurers to provide \u201call-risk policies\u201d based on coverage thresholds and rating factors dictated by a board in which the insurance industry is only nominally represented. Last year\u2019s budget uncertainty \u2013 in which a potential government shutdown was threatened \u2013 left open the very real possibility of funding for NFIP expiring if Congress failed to reach a deal.<\/p>\n<p>\u201cFederal policies and programs, including NFIP, are essential,\u201d said Daniel Kaniewski, managing director, public sector, for Marsh McLennan in his testimony. \u201cBut all disasters are local, and so too are resilience investment decisions.\u201d<\/p>\n<p>Before joining Marsh McLennan, Kaniewski was the second-ranking official at FEMA, where he was the agency\u2019s first deputy administrator for resilience.<\/p>\n<p>\u201cTo increase the resilience of communities against the pervasive risk of flooding,\u201d Kaniewski testified, \u201cwe believe that risk transfer\u2014 including from the NFIP, private flood insurance, reinsurance, and parametric insurance \u2014 should be paired with risk reduction.\u201d<\/p>\n<p>In this regard, Kaniewski emphasized NFIP\u2019s <a href=\"https:\/\/www.fema.gov\/floodplain-management\/community-rating-system\">Community Rating System<\/a> (CRS), which encourages and rewards community floodplain management practices that exceed the NFIP\u2019s minimum&nbsp;requirements. He cited Tulsa, Okla., as one of two U.S. communities to have achieved the highest CRS rating (the other is Roseville, Calif.), making residents eligible for the program\u2019s greatest flood insurance discount of 45 percent.<\/p>\n<p>Even without achieving the maximum rating, citizens save on flood insurance when their communities invest in resilience. For example, <a href=\"https:\/\/insuranceindustryblog.iii.org\/miami-dade-fla-sees-flood-insurance-rate-cuts-thanks-to-resilience-investment\/\">Miami-Dade County, Fla.<\/a>, recently became the latest jurisdiction in the hurricane- and flood-prone state to benefit from CRS program. The county\u2019s new Class 3 rating will result in an estimated $12 million savings annually by giving qualifying residents and business owners in unincorporated parts of the county a 35 percent discount on flood insurance premiums.&nbsp;&nbsp;<\/p>\n<p><a href=\"https:\/\/resilience.iii.org\/resilience-blog\/floods\/fema-incentive-program-helps-communities-reduce-flood-insurance-rates-for-their-citizens\/\">Last year<\/a>, 17 other Florida jurisdictions achieved Class 3 ratings. In Cutler Bay \u2013 a town on Miami\u2019s southern flank with about 45,000 residents \u2013 the average premium dropped by $338. Citywide, that represented a savings of $2.3 million.<\/p>\n<p>Unfortunately, only 1,500 communities nationwide participate in CRS, underscoring the importance of awareness-building, education, and collaboration.<\/p>\n<p>Kaniewski also highlighted the opportunity presented by <a href=\"https:\/\/insuranceindustryblog.iii.org\/community-catastrophe-insurance-four-models-to-boost-resilience\/\">community-based catastrophe insurance<\/a> (CBCI), which uses <a href=\"https:\/\/insuranceindustryblog.iii.org\/rising-interest-seen-in-parametric-insurance\/\">parametric insurance<\/a> to provide coverage to local government entities that wish to cover a group of properties. Such programs enhance financial resilience by simultaneously providing affordable coverage and creating incentives for risk reduction.<\/p>\n<p>\u201cOur recent CBCI pilot in New York City was developed in partnership with the City of New York and several nonprofit and insurance industry partners and funded by the National Science Foundation,\u201d Kaniewski said. \u201cIt provides a level of financial protection for low-to-moderate-income households that previously lacked flood insurance.\u201d<\/p>\n<p>Kaniewski called on other industries \u2013 such as finance and real estate \u2013 to encourage flood resilience investments, along with the insurance industry and all levels of government. He cited the recent <a href=\"https:\/\/www.nibs.org\/reports\/resilience-incentivization-roadmap-20\">roadmap for resilience incentives<\/a> issued by the National Institute of Building Sciences (NIBS) \u2013 funded by Fannie Mae and co-authored by representatives of a cross-section of \u201cco-beneficiary industries\u201d \u2013 that focused on residential structures prone to flooding. Triple-I subject-matter experts were co-authors on the NIBS project.<\/p>\n<p>Sen. Tim Scott of South Carolina, committee co-chair \u2013 along with Sen. Sherrod Brown of Ohio \u2013 spoke from the perspective of a former insurance professional who has sold flood insurance about his state\u2019s recent investment in mitigation.<\/p>\n<p>\u201cIn 2023, the state\u2019s budget included significant funding for mitigation efforts that would reduce flood damage from future storms,\u201d Scott said.\u201cBacking up that investment, the South Carolina Office of Resilience released a nationally praised Statewide Risk Reduction Plan, identifying the communities most vulnerable to floods and targeting mitigation resources to protect those residents. These are&nbsp;local solutions to local challenges&nbsp;\u2013 and they will make a huge difference in the lives of South Carolinians.\u201d<\/p>\n<p>While solutions that work in South Carolina might not work in other states, Scott said, \u201cI\u2019m confident that similar, locally based solutions and approaches could make a huge difference.\u201d<\/p>\n<p>Sen. Katie Britt of Alabama invited Kaniewski to elaborate on her state\u2019s <a href=\"https:\/\/strengthenalabamahomes.com\/\">Strengthen Alabama Homes<\/a> program, which provides grants and insurance discounts to homeowners who make qualifying retrofits to their houses. Britt cited research that found the program had \u201cdirectly resulted in lower insurance premiums and higher home resale values.\u201d<\/p>\n<p>Kaniewski spoke in detail about Alabama\u2019s efforts, including Strengthen Alabama Homes \u2013 which, he pointed out, is now being emulated by other states, including hurricane- and flood-prone Louisiana. He also cited by name the author of the research Britt referenced \u2013 <a href=\"https:\/\/www.iii.org\/about-us\/non-resident-scholars\/dr-lawrence-lars-powell\">Dr. Lars Powell<\/a>, executive director of the Alabama Center for Insurance Information and Research&nbsp;at the University of Alabama and a Triple-I Non-resident Scholar \u2013 for producing \u201cthe first study that I\u2019ve seen that gives empirical data &#8212; real evidence that mitigation pays.\u201d<\/p>\n<p>Steve Patterson, mayor of Athens, Ohio, described a range of nature-based solutions his city has taken \u2013 from rerouting the Hocking River, which runs through the middle of the city, to removing invasive plants and restoring native trees along the bank.<\/p>\n<p>\u201cThat\u2019s been very effective in reducing flooding in different neighborhoods throughout the city,\u201d Patterson said. \u201cThere are a lot of things cities and villages can do.\u201d<\/p>\n<p>The work done by Athens \u2013 like green infrastructure work by the <a href=\"https:\/\/insuranceindustryblog.iii.org\/milwaukee-district-eyes-expanding-nature-based-flood-mitigation-plan\/\">Milwaukee Metropolitan Sewerage District<\/a> in Wisconsin and municipal entities \u2013 offers opportunities to reduce flood risk while improving quality of life for citizens. But, as Patterson points out, not all municipalities have the financial capacity to engage in such projects.<\/p>\n<p>That is where the engagement of co-beneficiaries of resilience investment as partners becomes so crucial.<\/p>\n<p><strong><em>Learn More:<\/em><\/strong><\/p>\n<p><a href=\"https:\/\/www.iii.org\/article\/flood-state-of-the-risk\">Triple-I Issues Brief: Flood<\/a><\/p>\n<p><a href=\"https:\/\/insuranceindustryblog.iii.org\/miami-dade-fla-sees-flood-insurance-rate-cuts-thanks-to-resilience-investment\/\">Miami-Dade, Fla., Sees Flood Insurance Rate Cuts, Thanks to Resilience Investment<\/a><\/p>\n<p><a href=\"https:\/\/insuranceindustryblog.iii.org\/milwaukee-district-eyes-expanding-nature-based-flood-mitigation-plan\/\">Milwaukee District Eyes Expanding Nature-Based Flood-Mitigation Plan<\/a><\/p>\n<p><a href=\"https:\/\/insuranceindustryblog.iii.org\/attacking-the-risk-crisis-roadmap-to-investmentin-flood-resilience-2\/\">Attacking the Risk Crisis: Roadmap to Investment in Flood Resilience<\/a><\/p>\n<p><a href=\"https:\/\/resilience.iii.org\/resilience-blog\/floods\/proposed-flood-zone-expansion-would-increase-need-for-private-insurance\/\">Proposed Flood Zone Expansion Would Increase Need for Private Insurance<\/a><\/p>\n<p><a href=\"https:\/\/resilience.iii.org\/resilience-blog\/floods\/fema-incentive-program-helps-communities-reduce-flood-insurance-rates-for-their-citizens\/\">FEMA Incentive Program Helps Communities Reduce Flood Insurance Rates for Their Citizens<\/a><\/p>\n<p><a href=\"https:\/\/resilience.iii.org\/resilience-blog\/general\/fema-names-disaster-resilience-zones-targeting-at-risk-communities-for-investment\/\">FEMA Names Disaster Resilience Zones, Targeting At-Risk Communities for Investment<\/a><\/p>\n<p><a href=\"https:\/\/insuranceindustryblog.iii.org\/shutdown-threat-looms-over-u-s-flood-insurance\/\">Shutdown Threat Looms Over U.S. Flood Insurance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If there was a recurring theme in last week\u2019s Senate Banking Committee hearing on reauthorization of FEMA\u2019s National Flood Insurance Program (NFIP), it was the need for: Congress to reauthorize NFIP, and Communities, businesses, and government at all levels to invest in mitigating flood risk and in improving resilience. It\u2019s important to amplify this message, especially in light of a recent proposal by Rep. Adam Schiff that would, among other things, disband NFIP and require property\/casualty insurers to provide \u201call-risk policies\u201d based on coverage thresholds and rating factors dictated by a board in which the insurance industry is only nominally represented. Last year\u2019s budget uncertainty \u2013 in which a potential government shutdown was threatened \u2013 left open the very real possibility of funding for NFIP expiring if Congress failed to reach a deal. \u201cFederal policies and programs, including NFIP, are essential,\u201d said Daniel Kaniewski, managing director, public sector, for Marsh McLennan in his testimony. \u201cBut all disasters are local, and so too are resilience investment decisions.\u201d Before joining Marsh McLennan, Kaniewski was the second-ranking official at FEMA, where he was the agency\u2019s first deputy administrator for resilience. \u201cTo increase the resilience of communities against the pervasive risk of flooding,\u201d Kaniewski testified, \u201cwe believe that risk transfer\u2014 including from the NFIP, private flood insurance, reinsurance, and parametric insurance \u2014 should be paired with risk reduction.\u201d In this regard, Kaniewski emphasized NFIP\u2019s Community Rating System (CRS), which encourages and rewards community floodplain management practices that exceed the NFIP\u2019s minimum&nbsp;requirements. He cited Tulsa, Okla., as one of two U.S. communities to have achieved the highest CRS rating (the other is Roseville, Calif.), making residents eligible for the program\u2019s greatest flood insurance discount of 45 percent. Even without achieving the maximum rating, citizens save on flood insurance when their communities invest in resilience. For example, Miami-Dade County, Fla., recently became the latest jurisdiction in the hurricane- and flood-prone state to benefit from CRS program. The county\u2019s new Class 3 rating will result in an estimated $12 million savings annually by giving qualifying residents and business owners in unincorporated parts of the county a 35 percent discount on flood insurance premiums.&nbsp;&nbsp; Last year, 17 other Florida jurisdictions achieved Class 3 ratings. In Cutler Bay \u2013 a town on Miami\u2019s southern flank with about 45,000 residents \u2013 the average premium dropped by $338. Citywide, that represented a savings of $2.3 million. Unfortunately, only 1,500 communities nationwide participate in CRS, underscoring the importance of awareness-building, education, and collaboration. Kaniewski also highlighted the opportunity presented by community-based catastrophe insurance (CBCI), which uses parametric insurance to provide coverage to local government entities that wish to cover a group of properties. Such programs enhance financial resilience by simultaneously providing affordable coverage and creating incentives for risk reduction. \u201cOur recent CBCI pilot in New York City was developed in partnership with the City of New York and several nonprofit and insurance industry partners and funded by the National Science Foundation,\u201d Kaniewski said. \u201cIt provides a level of financial protection for low-to-moderate-income households that previously lacked flood insurance.\u201d Kaniewski called on other industries \u2013 such as finance and real estate \u2013 to encourage flood resilience investments, along with the insurance industry and all levels of government. He cited the recent roadmap for resilience incentives issued by the National Institute of Building Sciences (NIBS) \u2013 funded by Fannie Mae and co-authored by representatives of a cross-section of \u201cco-beneficiary industries\u201d \u2013 that focused on residential structures prone to flooding. Triple-I subject-matter experts were co-authors on the NIBS project. Sen. Tim Scott of South Carolina, committee co-chair \u2013 along with Sen. Sherrod Brown of Ohio \u2013 spoke from the perspective of a former insurance professional who has sold flood insurance about his state\u2019s recent investment in mitigation. \u201cIn 2023, the state\u2019s budget included significant funding for mitigation efforts that would reduce flood damage from future storms,\u201d Scott said.\u201cBacking up that investment, the South Carolina Office of Resilience released a nationally praised Statewide Risk Reduction Plan, identifying the communities most vulnerable to floods and targeting mitigation resources to protect those residents. These are&nbsp;local solutions to local challenges&nbsp;\u2013 and they will make a huge difference in the lives of South Carolinians.\u201d While solutions that work in South Carolina might not work in other states, Scott said, \u201cI\u2019m confident that similar, locally based solutions and approaches could make a huge difference.\u201d Sen. Katie Britt of Alabama invited Kaniewski to elaborate on her state\u2019s Strengthen Alabama Homes program, which provides grants and insurance discounts to homeowners who make qualifying retrofits to their houses. Britt cited research that found the program had \u201cdirectly resulted in lower insurance premiums and higher home resale values.\u201d Kaniewski spoke in detail about Alabama\u2019s efforts, including Strengthen Alabama Homes \u2013 which, he pointed out, is now being emulated by other states, including hurricane- and flood-prone Louisiana. He also cited by name the author of the research Britt referenced \u2013 Dr. Lars Powell, executive director of the Alabama Center for Insurance Information and Research&nbsp;at the University of Alabama and a Triple-I Non-resident Scholar \u2013 for producing \u201cthe first study that I\u2019ve seen that gives empirical data &#8212; real evidence that mitigation pays.\u201d Steve Patterson, mayor of Athens, Ohio, described a range of nature-based solutions his city has taken \u2013 from rerouting the Hocking River, which runs through the middle of the city, to removing invasive plants and restoring native trees along the bank. \u201cThat\u2019s been very effective in reducing flooding in different neighborhoods throughout the city,\u201d Patterson said. \u201cThere are a lot of things cities and villages can do.\u201d The work done by Athens \u2013 like green infrastructure work by the Milwaukee Metropolitan Sewerage District in Wisconsin and municipal entities \u2013 offers opportunities to reduce flood risk while improving quality of life for citizens. But, as Patterson points out, not all municipalities have the financial capacity to engage in such projects. That is where the engagement of co-beneficiaries of resilience investment as partners becomes so crucial. Learn More: Triple-I Issues Brief: Flood Miami-Dade, Fla., Sees Flood Insurance Rate Cuts, Thanks to Resilience Investment Milwaukee District Eyes Expanding Nature-Based Flood-Mitigation Plan Attacking the Risk Crisis: Roadmap to Investment in Flood Resilience Proposed Flood Zone Expansion Would Increase Need for Private Insurance FEMA Incentive Program Helps Communities Reduce Flood Insurance Rates for Their Citizens FEMA Names Disaster Resilience Zones, Targeting At-Risk Communities for Investment Shutdown Threat Looms Over U.S. Flood Insurance<\/p>\n","protected":false},"author":1,"featured_media":360,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[15],"tags":[],"_links":{"self":[{"href":"http:\/\/cherishedmemoriesstudios.com\/index.php\/wp-json\/wp\/v2\/posts\/355"}],"collection":[{"href":"http:\/\/cherishedmemoriesstudios.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cherishedmemoriesstudios.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/cherishedmemoriesstudios.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/cherishedmemoriesstudios.com\/index.php\/wp-json\/wp\/v2\/comments?post=355"}],"version-history":[{"count":2,"href":"http:\/\/cherishedmemoriesstudios.com\/index.php\/wp-json\/wp\/v2\/posts\/355\/revisions"}],"predecessor-version":[{"id":361,"href":"http:\/\/cherishedmemoriesstudios.com\/index.php\/wp-json\/wp\/v2\/posts\/355\/revisions\/361"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/cherishedmemoriesstudios.com\/index.php\/wp-json\/wp\/v2\/media\/360"}],"wp:attachment":[{"href":"http:\/\/cherishedmemoriesstudios.com\/index.php\/wp-json\/wp\/v2\/media?parent=355"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cherishedmemoriesstudios.com\/index.php\/wp-json\/wp\/v2\/categories?post=355"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cherishedmemoriesstudios.com\/index.php\/wp-json\/wp\/v2\/tags?post=355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}