Industry IQ: House extends NFIP until March

The House has passed legislation extending the National Flood Insurance Program, which was due to expire in 2 months, until March 31.

The measure was combined with legislation introduced recently by Rep. Doris Matsui (D-Calif.), aimed at making it easier for states and local communities to restore or improve their flood protection systems.

As of press time, the bill (H.R. 3139) needs to pass the Senate for approval. In seeking an extension, Rep. Barney Frank (D -Mass.), chairman of the House Financial Services Committee, said more time is needed to work with the Senate on a comprehensive overhaul of the flood insurance program, which insures properties worth approximately $1 trillion in flood-prone areas.

The March 31 extension is a compromise. Rep. Frank had sought a year's extension, to Sept. 30, 2010, but Republicans balked, agreeing only to the 6-month extension, according to several insurance industry lobbyists.

The current extension expires Sept. 30 and Rep. Frank said that is not enough time to work with the Senate on a modernized program because of other pressing business.

A spokesman for Rep. Frank said he is certain the Senate will act before the current authorization expires.

The legislation by Rep. Matsui makes technical changes to the NFIP to take local, state and federal funding into account when determining flood zone designations.

David A. Sampson, president and CEO of the Property Casualty Insurers Assn. of America, said the PCI "will continue to work with Congress on needed reforms to the program, a long-term reauthorization, and restoration of the program to fiscal soundness, which is the necessary solution for this vital program."

Charles E. Symington, senior vice president for government affairs for the Independent Insurance Agents and Brokers of America, said the extension should provide Congress ample time to continue work on long-term improvements to the program.

He said that as passed through different bills in the House and Senate in 2007 and 2008, the legislation would have extended the program for 5 years and made significant and needed reforms to help put the program on sound financial footing.