Senate Approves 60-Day Flood Program Extension; Will House Agree?

May 25, 2012

The Senate agreed yesterday in a unanimous consent to extend the National Flood Insurance Program (NFIP) for 60-days past its current expiration date of May 31. Last week, the U.S. House of Representatives voted 402 to 18 on a separate measure, H.R. 5740, to extend the NFIP for 30-days.

It remains to be seen if the House will adopt the Senate 60-day reauthorization when its members return after the Memorial Day weekend.

The Senate vote on the temporary reauthorization came after an agreement was struck for the full Senate to consider in June a long-stalled, longer-term renewal and reform of the program and after insertion of an amendment ending premium subsidies for vacation homes. The agreement was struck by Majority Leader Harry Reid, D-Nev., Banking Committee Chairman Tim Johnson, D-S.D., Ranking Member Richard Shelby, R-Ala.), Sen. David Vitter, R-La. and Sen. Tom Coburn, R-Okla.

The full House and the Senate Banking Committee have passed long-term measures but the full Senate has not acted.

“Today’s passage of a short-term NFIP extension by the Senate represents not an end, but another step towards one. While they failed to pass long term reauthorization and reform, this may indeed be the last short term extension of this program. The House will now need to adopt this extension if a lapse of this vital program is to be avoided prior to May 31,” said Jimi Grande, senior vice president, National Association of Mutual Insurance Companies.

The Senate’s 60-day extension legislation contains one policy provision that would remove the subsidies granted to second homes and vacation homes by the NFIP. According to the Independent Insurance Agents & Brokers of America (Big “I”), this provision was included in order to ensure the measure gained unanimous consent and is also a part of S. 1940, the “Flood Insurance Reform and Modernization Act,” which extends NFIP for five years.

Sen. Roger Wicker, R-Miss., was among those supporting the a 60-day extension. “Both sides agree that NFIP needs changes to make it viable for homeowners and taxpayers, and this agreement moves us closer to those reforms,” said Wicker. “Families living on the coast or in other floodplains need more certainty than the piecemeal approach that has been the norm. I remain committed to putting a workable solution for flood insurance in place.”

During Senate markup, an agreement was reached to add a Wicker amendment, known as the COASTAL Amendment, when the long-term bill is considered by the full Senate. The COASTAL Amendment would use hurricane data collected by the National Oceanic and Atmospheric Administration in conjunction with engineering formulas to be developed by FEMA to double check flood insurance claims for total-loss, “slab” properties.

Wicker said that use of the COASTAL formula will help prevent the inappropriate shifting of wind claims to the flood program and will empower consumers by providing a better estimation of wind versus water losses.

The insurance industry, which has for years been pressing Congress to reform and renew the flood insurance program got an extended period, appears optimistic that this goal may finally be within reach.

“Today’s actions in the Senate are very much appreciated,” said John Prible, Big “I” vice president for federal government affairs. “While the 60-day extension is just a temporary patch, this patch combined with the agreement reached on the Senate floor, opens the window to the possibility of finally getting the ‘Flood Insurance Reform and Modernization Act’ across the finish line.”

“Today’s vote makes it abundantly clear that preventing another lapse and reforming and reauthorizing the NFIP enjoys broad bipartisan support in both the Senate and House,” said Tom Santos, vice president for federal affairs at the American Insurance Association.

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