AG Jeff Landry files federal lawsuit over FEMA flood insurance risk rating system

Published 1:29 am Saturday, June 3, 2023

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(The Center Square) — A federal lawsuit unveiled in Louisiana on Thursday could have a far-reaching impact on flood insurance premiums across the country tied to the Federal Emergency Management Association’s Risk Rating 2.0 system.

Attorney General Jeff Landry and Solicitor General Liz Murrill led a press conference in New Orleans on Thursday to announce the lawsuit alongside Greater New Orleans Inc. CEO Michael Hecht and parish presidents and levee district directors.

Those officials are joined by 43 parishes, 10 states, and a dozen levy boards who want FEMA to explain the agency’s calculations used in Risk Rating 2.0 implemented over the last two years that’s drastically increasing flood insurance premiums for Louisiana homeowners and others across the country, in some cases by 1,000%.

“If we’re not able to contain this problem … then that will further complicate the outward migration problem Louisiana has,” Landry said. “We want reasonable, reliable premiums so Louisiana can grow our economy.”

According to FEMA, the pricing methodology for the National Flood Insurance Program “leverages industry best practices and cutting-edge technology to enable FEMA to deliver rates that are actuarially sound, equitable, easier to understand and better reflect a property’s flood risk.”

The agency, however, has refused requests from the Louisiana congressional delegation and other officials to explain the methodology behind Risk Rating 2.0 to better understand the factors driving the drastic increases.

“It’s not just a coastal issue,” Murrill said. “It impacts anyone who lives around a lot of water. We didn’t set out to sue FEMA, we set out years ago to work with FEMA.”

“They shut the door on us,” she said, “and they have doggedly refused to give us the information that would explain to us why these dramatic increases are being imposed on the people of our state and people of other states.”

Murrill noted FEMA officials have acknowledged Risk Rating 2.0 does not take into account flood mitigation efforts in Louisiana.

The 112-page complaint alleges FEMA exceeded its statutory authority and violated the mandate imposed by Congress to provide reasonable flood insurance by using an arbitrary and capricious process.

The lawsuit, which includes five dozen declarations of support from individuals, state agencies, parishes and others, seeks to block FEMA from implementing the “deeply flawed program,” Murrill said.

“The problem with this program is that somebody’s idea of climate change is creating a redundant hammer on the people of Louisiana and the country and imposing an additional cost for speculation,” she said. “That is where the lack of transparency is coming in.”

“We believe that they should go back to the legacy program, we call it Risk 1.0, and revert back to that program until they can fix this,” Murrill said. “Our first level of remedy that we are asking for is an injunction to stop Risk 2.0.”

Parish presidents and others explained how the change, combined with increases in homeowners insurance, is driving Louisianans out of their homes. GNO Inc. is tracking home foreclosures tied to Risk Rating 2.0.

A summary produced by Landry’s office contends “90% of Louisiana ratepayers subject to an increase in their flood insurance premiums can expect to see their annual cost increase by 18% per year for the next ten years.

“In practice, this means that a policy that was zoned to cost $572 per year in 2021 may eventually exceed $8,000 per year under the new pricing methodology,” the document read.

The lawsuit filed in the U.S. District Court for the Eastern District of Louisiana in New Orleans, Landry said, “is the last step we can take to protect the citizens of this state.”