Lawmakers' request for information on the National Flood Insurance Program (NFIP) ahead of its post-recess reauthorization battle signals changes that could fundamentally reshape how the federal government transfers flood risk and assesses catastrophe exposure.
The August 15, 2025 letter from Senators Bill Cassidy (R-LA) and Cory A. Booker (D-NJ) specifically asks whether the NFIP should expand beyond traditional reinsurance to include "catastrophe bonds, resilience bonds, or other insurance linked securities" to achieve program sustainability.
The senators also questioned Risk Rating 2.0's transparency, asking whether the Federal Emergency Management Agency (FEMA) should publicize its risk rating data, methodologies, and modeling for public access, and whether the system should undergo third-party review for "reasonableness and consistency."
The senators further inquired about partnerships with private industry to provide "high quality, cost efficient, and regularly updated flood maps," suggesting potential opportunities for firms specializing in flood risk assessment.'
Questions about update frequency and incorporation of new data sources and technologies indicate Congress is considering modernization that could benefit tech-forward modeling companies.
Broader Reform Context
The 46-question request, with responses due September 15, 2025, references S. 2142, the National Flood Insurance Reauthorization and Reform Act of 2023, as the baseline reform proposal. Stakeholders are asked to evaluate its provisions with "trustworthy data and research with proper citations."
Key areas of inquiry include:
Rating Methodology: Multiple questions address whether Risk Rating 2.0 accurately reflects property risk and mitigation efforts, how often it should be updated, and whether communities or policyholders should be allowed to contribute information to FEMA's rating methodology.
Coverage Limits: Current NFIP limits of $250,000 for residential building coverage are questioned, with senators exploring "supplemental or layered insurance approaches" that could create new private market opportunities.
Mapping Improvements: Questions about five-year map update requirements and effective public-private partnerships for flood mapping suggest expanded contracting opportunities.
Affordability Programs: Proposals for income-based discounts and grandfathering provisions could affect risk distribution and pricing models.
Transparency Requirements: Demands for greater transparency in rate-setting and claims processing could require sophisticated modeling and reporting capabilities.
