Insurers today will again urged federal lawmakers to reauthorize and reform the nation’s flood insurance program, which is slated to lapse on Sept. 30 if Congress does not act.
At a hearing today, a Senate Banking subcommittee will hear from representatives of the Government Accountability Office and others. The GAO recently released another report with recommendations backed by insurers that would allow the National Flood Insurance Program to charge premiums more reflective of the flood risk facing a property, improve the flood maps used to determine high risk areas and expand the program’s authority to deal with repetitive loss properties.
The NFIP is currently $18 billion in debt to the U.S. Treasury.
The problems facing the NFIP have not changed and will not improve unless Congress acts to reform the program, the National Association of Mutual Insurance Companies (NAMIC) will again tell the Senate committee.
“The fundamental structural flaws within the NFIP are the same now as they were six months ago, a year ago and almost six years ago when Hurricane Katrina devastated the Gulf coast,” said Jimi Grande, senior vice president of federal and political affairs at NAMIC. “Now is the time for Congress to act, and we urge the Senate to take up and pass NFIP reform legislation prior to the September 30 deadline.”
Grande said the NFIP must be allowed to “charge prices that reflect the risk of flooding for a property, and modernized maps will ensure we determine that risk based on the best scientific data available.
At an earlier June hearing on the NFIP, Sen. Tim Johnson, D-S.D., Banking Committee chairman, said he hoped reauthorization legislation would pass before the Sept. 30 expiration.
“Over the past year, we have also faced several lapses in the NFIP. As many stakeholders have noted, lapses have detrimental effects on both the insurance and housing markets,” Johnson said. “This program, which provides over $1.2 trillion in coverage, needs certainty. It is my hope to provide this through a long-term extension.”
The American Insurance Association (AIA) also submitted testimony to the Senate committee and told lawmakers that “previous lapses in the flood program “hindered numerous consumer housing closings and caused significant uncertainty for our nation’s millions of NFIP policyholders, as well as real-estate professionals, lenders and insurers.”
The House Financial Services Committee has approved legislation (H.R. 1309, the Flood Insurance Reform Act), introduced by Rep. Judy Biggert, R-Ill., that includes many of the reforms sought by the insurance industry, consumer groups and federal officials. The bill is currently awaiting a vote on the House floor.
“A stronger NFIP will benefit the homeowners facing flood risks and reduce the potential burden on the taxpayers,” NAMIC’s Grande said. “There are no more excuses for delay. As we wait amidst the Hurricane season for the Atlantic and Gulf Coasts with already historic levels of flooding across the country, Congress can no longer kick this can down the road. We need reform and reauthorization now.”
Was this article valuable?
Here are more articles you may enjoy.