Kennedy, Cassidy, colleagues urge FEMA to halt Risk Rating 2.0, block flood insurance premium hikes

WASHINGTON - Sens. John Kennedy and Bill Cassidy (R-La.), along with Sens. Cindy Hyde-Smith (R-Miss.), Roger Wicker (R-Miss.), Jim Justice (R-W.Va.), Shelley Moore Capito (R-W.Va.), Tommy Tuberville (R-Ala.), and John Cornyn (R-Texas), urged acting Federal Emergency Management Agency (FEMA) Administrator Karen Evans to halt further implementation of the Risk Rating 2.0 pricing system under the National Flood Insurance Program (NFIP) and provide full transparency into how flood insurance rates are set.

The lawmakers raised concerns that Risk Rating 2.0 has driven sharp premium increases among Louisianians and nationwide, forcing many homeowners to drop coverage and undermining the NFIP's long-term stability.

"Since Risk Rating 2.0 took effect, flood insurance premiums have increased in every state, and FEMA estimates that approximately 77 percent of policyholders now pay more than they would have under the prior system. In Louisiana and other flood-prone states, premium increases of well over 100 percent have forced tens of thousands of homeowners to drop coverage altogether. These trends are not isolated-they reflect a nationwide contraction in NFIP participation driven by affordability pressures," the senators wrote.

"This loss of participation is a structural problem for the NFIP. Flood insurance depends on a broad risk pool to function effectively. As policyholders exit the program, risk becomes more concentrated, premiums face additional upward pressure, and volatility increases," they continued.

"We are also concerned by FEMA's continued lack of transparency surrounding Risk Rating 2.0. FEMA has not released the underlying data, assumptions, or modeling used to generate premium increases, nor provided a mechanism for meaningful external review," the legislators added.

In light of these concerns, Kennedy and Cassidy urged FEMA to promptly terminate the current Risk Rating 2.0 pricing methodology and provide transparency into the NFIP's rate-setting procedures.

"Time is of the essence. Each year Risk Rating 2.0 remains in place, participation continues to erode, the insurance pool weakens, and taxpayer exposure grows. Immediate action must be taken to stop the actuarial death spiral. We urge FEMA to act promptly to correct course and ensure the NFIP fulfills its core mission of protecting homeowners, communities, and federal taxpayers alike," the lawmakers explained.

Background:

• In March 2023, Kennedy introduced two bills, the Flood Insurance Affordability Act and the Risk Rating 2.0 Transparency Act, to address the disastrous rollout of Risk Rating 2.0. The bills would cap annual flood insurance premium increases and require FEMA to publish an explanation of how the agency determines flood insurance prices under Risk Rating 2.0.

• In January 2024, Kennedy spoke in the Senate Banking Committee about the premium hikes Louisianians have faced throughout Risk Rating 2.0's implementation, explaining that FEMA "lied to the American people and my people, and they ought to hide their heads in a bag."

• In June 2025, Kennedy, Cassidy and seven colleagues authored an earlier letter to FEMA raising concerns about unaffordable premium increases and the lack of transparency under Risk Rating 2.0. Since then, newly available FEMA data and peer-reviewed research have confirmed those concerns, revealing sharp declines in NFIP participation following the implementation of Risk Rating 2.0.

Full text of the January 2026 letter is available here.