Filed Under:Markets, Commercial Lines

Push Begins in Earnest for NFIP Extension with Reforms

NU Online News Service, Feb. 14, 3:04 p.m. EST

Forty-one signatures have been secured on a letter from senators to the Senate leadership urging prompt action on legislation reauthorizing the National Flood Insurance Program.

At a press conference at the new Capitol Visitors’ Center, Sens. John Tester, D-Mont., and David Vitter, R-La., primary sponsors of the letter, said today that they would use the letter to persuade Sen. Harry Reid, D-Nev., majority leader, and Sen. Mitch McConnell, R-Ken., to put the NFIP long-term extension bill on the floor as soon as time permits.

At the same time, Frank Nutter, president and CEO of the Reinsurance Association of America, said at the conference that the reinsurance industry was particularly interested in a provision that would allow private reinsurers to offload some of the flood program’s risk.

The provision was included in the House version of the bill, which passed the House floor last July. “The industry has the capacity and is interested in participating,” he said.

Tester says he believes there is enough support for prompt action to secure the 60 votes needed to ensure that the bill is talked to death on the floor.

He also says that he believes Reid is prepared to move the bill to the floor.

Prompt action is needed because the current extension for the program ends May 31.

The current program has been operating on extensions—with some breaks in the program—since Sept. 30, 2008.

As noted at the press conference by Charles Chamness, president and CEO of the National Association of Mutual Insurance Companies, the new flood season begins June 1, the day after the program expires.

Tester acknowledges that support for the bill is not the holdup; the holdup is that Reid is concerned that McConnell will seek to use the must-do bill as an engine to push through controversial provisions opposed by Senate Democrats.

“Sen. Vitter and I are very well aware that that possibility exists on all bills, and we will have to work hard to ensure that the bill remains as narrow as possible,” Tester explains.

Vitter adds that, “for no good reason the NFIP has been shut down for 53 days in 2010” because an extension to the program ran out.

As a result, adds Vitter, 1,400 home closings were either cancelled our postponed.

He was citing data provided by the Property Casualty Insurers Association of America. According to PCI officials, in 2010, the NFIP lapsed four times and flood coverage could not be purchased or renewed for a total of 53 days.

Vitter says Congress “must take the next step and pass legislation providing a long-term reauthorization of the program” before May 31.

Also attending the meeting were officials of the Heartland Institute, the National Wildlife Federation, American Insurance Association, Taxpayers for Common Sense, American Rivers, NAMIC and RAA.

Vitter notes that PCI, the National Association of Realtors, the Financial Services Roundtable and the Independent Insurance Agents and Brokers of America, were all supporting the effort to have the Senate act promptly on reauthorization legislation.

The Senate bill has no name. The House last July passed H.R. 1309, the “Flood Insurance Reform Act of 2011,” by an overwhelming majority. The bill, sponsored by Rep. Judy Biggert, R-Ill, would, among other provisions, extend the NFIP until Sept. 30, 2016.

The Senate Banking Committee reported to the floor a similar bill in early September. Floor action has been pending since then.

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