In testimony before the U.S. Senate in September, Federal Emergency Management Agency (FEMA) director, Craig Fugate, told Senators that if skyrocketing flood insurance premiums put coastal homeowners in dire straits, there was nothing he could do about it. The Miami Herald covered the story on September 18 (see: "Fugate tells Congress: It's up to you to stop rate increases for flood insurance," by Mary Ellen Klas).

Congress is considering legislation that would halt the rate increases, at least temporarily. But state officials in three states heavily affected by the rate increases—Mississippi, Louisiana, and Florida—are now trying to tie Fugate's hands in a different way: They argue that FEMA actually lacks the authority to impose the rate hikes, and they want a Federal judge to stop it. They also say that FEMA has yet to study and report on the economic impact of the changes, as required by the Biggert-Waters Act, which spurred the increases.

The Mississippi Department of Insurance filed suit in Federal court in late September, the Insurance Journal reported (for the full story, see: "Mississippi Insurance Chief Sues to Halt Flood Insurance Rate Hikes," by Emily Wagster Pettus). The suit targets the U.S. Department of Homeland Security and FEMA, naming Fugate as a defendant in his role as FEMA director. (Here's a link to Mississippi's official complaint in the case.)

Louisiana now says it may join Mississippi's lawsuit against FEMA, or may file its own suit. Houma Today had this report on October 11: ("Louisiana to sue over flood insurance reform," by Xerxes Wilson). "Louisiana plans to sue the federal government to delay or block potentially unaffordable price increases tied to reform of the National Flood Insurance Program," the paper reported. "We are going to file suit," Louisiana Insurance Commissioner, James Donelon, said. "The question now being decided by the lawyers we have hired is whether we file in the pending Mississippi action or a separate action in Louisiana."

Florida officials say they now back Mississippi's effort, too. Florida has not filed its own case, but says it will file a "friend of the court brief" in support of Mississippi's case. The Florida Current has this report: ("State backs Mississippi lawsuit over flood insurance," by Bill Cotterell). Reports the Current: "Gov. Rick Scott, Attorney General Pam Bondi and Chief Financial Officer Jeff Atwater had announced on Oct. 10 that they planned to file a 'friend of the court' brief in the U.S. District Court for southern Mississippi. The brief announced by Scott and Bondi on Tuesday [November 12] made four main arguments:

  • That FEMA should have to compete studies required by a 2012 flood insurance reform act before setting new rates.
  • That FEMA has implemented the National Flood Insurance Program, as amended last year, in an 'arbitrary and capricious' manner.
  • That new premiums fail to consider affordability.
  • That FEMA did not use "accepted actuarial principles" and consider actual risk, when setting new rates.