The Senate Banking Committee’s discussion on Thursday of proposed reforms to the National Flood Insurance Program (NFIP) was reportedly an important step, and the Independent Insurance Agents & Brokers of America (the Big “I”) hopes to see common-sense changes as the end result of the process.
During the hearing, the Big “I” said it was pleased to note that Committee Chairman Richard Shelby (R-Ala.) and Ranking Member Paul Sarbanes (D-Md.) appeared to favor increasing NFIP borrowing authority separate from other reforms.
“We are pleased that Chairman Shelby and Ranking Member Sarbanes have acknowledged the need to increase the borrowing authority in order to honor the contractual obligations to those who bought flood insurance prior to the 2005 hurricane season,” said Charles Symington Jr., Big “I” senior vice president for government affairs and federal relations. “We are particularly pleased that they appear to view aspects of reform as a separate issue that looks toward the future and has no direct bearing on the government’s obligation to act in a responsible manner.”
The Big “I” on Nov. 11, 2005, released a comprehensive flood reform package with 22 recommendations to modernize coverage, simplify processing and claims and expedite enforcement, among other needed changes. Chief among these are the addition of optional business interruption coverage on commercial policies, increases in the maximum coverage limits, and the inclusion of additional living expenses coverage for residential policies.
A number of the Big “I” proposals were included in H.R. 4320, the National Flood Insurance Program Commitment to Policyholders and Reform Act, introduced by House Financial Services Committee Chairman Mike Oxley (R-Ohio) and Ranking Member Barney Frank (D-Mass.). The association also has staunchly supported extension of the NFIP’s borrowing authority.
“We strongly support needed reforms to the NFIP, and we want to see these reforms enacted the right way—in a common-sense manner that doesn’t impact negatively on consumers or agents,” added Patrick O’Brien, Big “I” director of federal government affairs. “We would hope that reforms to the program would not be used as leverage to obtain the remaining borrowing authority needed to pay the outstanding balances on claims for those who took the initiative to purchase flood insurance prior to the catastrophic hurricane season. We’re hopeful that Congress will move swiftly to meet that goal by increasing the borrowing authority.”
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