Industry officials are starting to prepare for the prospect of another short-term extension to the National Flood Insurance Program (NFIP), as the deadline from the last extension is fast approaching.
Charles Symington, senior vice president of government affairs for the Independent Insurance Agents and Brokers of America (IIABA), says, “As time goes by, it is increasingly unlikely that the Flood Insurance Modernization bill will be able to pass the Senate and be reconciled with the House version before the scheduled expiration of the NFIP on Nov. 18.”
The House in July passed H.R. 1309, “The Flood Insurance Reform Act of 2011,” which would reform and modernize the program and extend it until Sept. 30, 2016.
The Senate long-term extension bill is “The Flood Insurance Reform and Modernization Act,” the passage of which would set the stage for negotiations designed to merge the mostly similar bills. However, Senate-floor action on legislation passed out of committee Sept. 8 has still not been scheduled.
Sources say the reason action on legislation extending the program until Sept. 30, 2016 is unlikely is because senators on both sides of the aisle are demanding that the bill be used as an engine to deal with issues not related to the NFIP.
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MCRAITH LAYS OUT FIO VISION
In his first public appearance since being named Federal Insurance Office (FIO) director, Michael McRaith sought to alleviate concerns among those in the industry by saying the states would remain the functional regulators of insurance, and that FIO data requests would not be duplicative.
McRaith says the FIO will consult and work closely with the state-insurance departments, which remain the functional regulators, and will request information only if the information is not already available from public sources, a federal agency or a state regulator.
He said he will also coordinate with the Office of Financial Research to reduce reporting burdens by avoiding unnecessary or redundant data requests.
“My aspiration is to develop a foundation of interaction between the FIO and state regulators, to establish customs and practices that best serve the United States, our economy, the insurance industry and consumers,” McRaith said. He made his comments on Oct. 25 in testimony before the Subcommittee on Insurance, Housing and Community Opportunity of the House Financial Services Committee.
Industry reaction was mixed. Officials of the National Association of Mutual Insurance Companies say McRaith appears to “have an understanding” of the role the new agency is to fulfill.
But officials of the National Association of Professional Insurance Agents, while expressing appreciation that McRaith affirmed that the FIO is not a regulator, also voice concerns with McRaith’s remarks that the FIO’s portfolio “is still being defined.”
