The U.S. House of Representatives has a measure extending the federal flood insurance program for five years.
The bill, H.R. 5114, the “Flood Insurance Reform Priorities Act of 2010,” sponsored by Rep. Maxine Waters (D-Calif.) and Rep. Barney Frank (D-Mass.), has the support of both the Independent Insurance Agents & Brokers of America (the Big “I”) and the National Association of Professional Insurance Agents (PIA National).
Agents now hope the Senate will follow the lead of the House, while insurers hope lawmakers will strike a provision eliminating anti-concurrent clauses from flood policies.
“The recent series of expirations and temporary extensions is negatively impacting the market,” said Robert Rusbuldt, Big “I” president and CEO. “The Big ‘I’ commends the House for passing this bill which is a step in the right direction to a long-term extension of the NFIP [National Flood Insurance Program] and includes much-needed reforms to the critical program.”
The NFIP was recently resurrected from a month-long expiration and is currently set to expire on Sept. 30, 2010. The Big “I” has noted that the program has worked for more than 40 years to help protect consumers from flood risks, and Congress has traditionally extended the program for five year periods in order to provide stability and security for the marketplace. Congress has recently only extended the program for short periods, from 30 days to six months.
Prior to passage, PIA National sent a letter to House Speaker Nancy Pelosi and Minority Leader John Boehner urging that the House quickly pass H.R. 5114.
“This bill contains many provisions that PIA has consistently advocated,” said PIA National Director of Federal Affairs Mike Becker. “Perhaps most significantly, H.R. 5114 extends the flood insurance program through the end of 2015. This would finally end the uncertainty that has resulted from a series of short-term NFIP reauthorizations.”
The insurer trade group, the Property Casualty Insurers Association of America (PCI), has said the House was correct in extending the flood insurance program. It opposes, however, an amendment to the bill that would require “Write Your Own” (WYO) insurers to eliminate so-called “anti-concurrent causation” language from their homeowners insurance policies.
“The House has taken the right step forward for homeowners and the American economy by crafting a strong, comprehensive extension of the National Flood Insurance Program. This action helps provide a greater degree of certainty for property owners and a real estate market that was left vulnerable by previous lapses in the government program,” said Ben McKay, PCI’s senior vice president, federal government relations, in a statement released by PCI.
“At the last minute, Rep. Gene Taylor (D-Miss.) succeeded in attaching a concurrent causation amendment to the flood bill that could make private insurers pay for the obligations of the federal government,” McKay continued. “Ultimately, the language Rep. Taylor added would prove unworkable, and we will work to convince the Senate to remove this troublesome language. But it is never a good idea to throw out three-quarters of a loaf of good bread, and overall, we are pleased that the House has taken a much-needed step toward extending and preserving the NFIP.”
The American Insurance Association (AIA) has said it also opposes the Taylor amendment, which it says would negatively impact WYO companies and significantly alter the way in which claims are processed by the NFIP.