Jackson Free Press

JACKSON, Miss. (AP) — The Mississippi Department of Insurance will drop a lawsuit filed in 2013 against the National Flood Insurance Program.

The lawsuit, filed in federal court in Jackson, sought to block flood insurance rates from increasing Oct. 1. State Insurance Commissioner Mike Chaney said at the time some customers could see their rates rise by more than 3,000 percent because of a 2012 federal law.

On Monday, Chaney announced the state will drop the lawsuit with Federal Emergency Management Agency's implementation of a new law passed by Congress meant to alleviate some of the dramatic rate increases facing Mississippi homeowners.

Chaney said lawyers for the Mississippi Insurance Department filed court papers Monday asking the lawsuit be dismissed "without prejudice," meaning it can be refiled again.

"I am very happy that Congress has acted to protect homeowners," Chaney said in a statement. "However, we will have to watch FEMA's implementation of it to be sure it actually fixes the problem. If it does, fine. If it doesn't, we are free to refile the lawsuit."

Chaney said his staff will be monitoring FEMA's implementation of the law over the next several months.

The 2012 law, known as the Biggert-Waters Flood Insurance Reform Act, was intended to keep the flood insurance program solvent after a large number of claims following Hurricane Katrina, which struck in 2005. The law removes federal subsidies from properties in flood zones.

FEMA said the phase-out of subsidies would have affected fewer than 20 percent of flood policyholders nationwide. In Mississippi, 14 percent of flood insurance policies were subsidized, according to the National Flood Insurance Program.

In March, Congress sought to ease their fears of sky-high premiums by rolling back a 2012 reform ending the government's costly practice of offering subsidized insurance for older homes and businesses in flood zones. The president signed the bill.