House Committee Delays On Long-Term Flood Insurance Bill

NU Online News Service, April 21, 4:14 p.m. EDT

WASHINGTON--The House Financial Services Committee has decided to delay action on legislation providing a long-term reauthorization of the National Flood Insurance Program until Tuesday.

The decision today came as a hearing on flood and catastrophe issues was taking place before the Housing and Community Opportunity Subcommittee of the House Financial Services Committee.

At the hearing, representatives of various industry trade groups urged prompt action on legislation providing a long-term reauthorization of the program. After being allowed to lapse on March 28 the flood insurance program was given a short-term renewal last Friday of 45 days.

The reauthorization bill is the Flood Insurance Reform Priorities Act of 2010.

Action on two other bills was also delayed until Tuesday. They are the Homeowners Defense Act of 2009, H.R. 2555, and the Multiple Peril Insurance Act of 2009, legislation sponsored by Rep. Gene Taylor, D-Miss. The Multiple Perils bill would add wind to the NFIP program.

At the hearing, Rep. Taylor said there are "simple reasons" wind will be added to the program.

"Homeowners and business owners in coastal communities need to be able to buy hurricane insurance that will cover hurricane damage without needing to hire lawyers and engineers to engage in prolonged disputes over what portion of the damage was caused by flooding and what portion was caused by wind," he said.

"As long as wind and flood coverage are in separate policies, there will be gaps in coverage and disputes over causation after hurricanes," he added.

But Kathy Mitchell, a federal affairs director at the National Association of Mutual Insurance Companies, argued against the bill sponsored by Rep. Taylor.

"Congress should be wary of adding windstorm coverage to the program, which could outweigh the benefits of the reforms and sink the entire NFIP deeper into debt," she said.

In other testimony, officials for the Independent Insurance Agents and Brokers of America generally praised the NFIP reauthorization bill, saying, "Although IIABA has some recommended improvements to the draft legislation, the underlying long-term extension is vital to provide stability and security to consumers."

The IIABA said that of particular concern "is the litany of short-term extensions the NFIP has experienced over the last year and a half."

Charles Symington, IIABA senior vice president for government affairs, said there "have been seven short-term extensions in the last 18 months, and the program is once again scheduled to expire on May 31, 2010 unless Congress approves an eighth such extension or acts on a long-term bill."

He noted, "These short-term extensions have unfortunately led to two expirations of the program just in the last few months, and today the IIABA testified that the lack of a long-term extension is of paramount concern."

In a letter to the committee, David A. Sampson, president and CEO of the Property Casualty Insurers Association of America, made the same point. "We need a long-term, sustainable solution to the flood program," he said.

Comments

Resource Center

View All »

Making Coverage Letters Work for Your Clients

If you're a broker or insurance buyer with any length of service in the commercial...

Complimentary White Paper: The Compression of Workplace Time

How brokers and carriers respond to the compression of workplace time will create significant competitive...

The Changing Insurance Consumer: 6 Ways to Create Profitable Relationships

Today’s mobile and web-savvy consumers have new expectations when it comes to interacting with your...

Contractors General Liability Coverage 102

What is a prior work exclusion? Which option is right for my client? Why do...

Sign up today to get a 50% matching credit -...

Insurance marketing sometimes seems like it's a game of swings and misses, but we're here...

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Personal Lines Pro eNewsletter

Critical insights into the personal auto, homeowners, and other consumer insurance markets to help P&C professionals stay informed – FREE! Sign Up Now!

Advertisement. Closing in 15 seconds.