NAIC Adopts Resolution as Flood Insurance Program Sunsets

Acting within hours of a request for assistance from the Federal Emergency Management Agency (FEMA), the National Association of Insurance Commissioners’ Property and Casualty Committee adopted a resolution to provide a level of certainty for insurers, insurance producers and policyholders as the sunset date of the National Flood Insurance Program approaches on Dec. 31, 2002. A copy of the resolution can be found on the NAIC’s Web site.

Until the program is extended, the National Flood Insurance Program is unable to issue or renew flood insurance policies beyond the Dec. 31, 2002, sunset date currently in effect. The NAIC is encouraging its members to waive any regulatory actions against companies related to technical compliance issues arising solely because of the lack of reauthorization of the program.

“Congress has, in the past, allowed the sunset date to expire and has always adopted legislation to retroactively reauthorize the program,” said NAIC President and Arkansas Insurance Commissioner Mike Pickens. “This resolution is a practical solution to the problem created by the technical expiration of the flood insurance program. In the interim period before Congress reauthorizes the program, we want to reassure companies and producers that no regulatory action will be taken against them.”

NAIC members are encouraging Congress to reauthorize the National Flood Insurance Program with a retroactive date of Jan. 1, 2003. House Financial Services Committee Chairman Michael Oxley announced that he would introduce legislation early next year, along with Representative Barney Frank, to reauthorize the program. The NAIC will continue to assist FEMA and Congress on this issue as the deadline approaches.