Members of Congress are being told that the National FloodInsurance Program has enough funds to pay claims resulting fromSandy until middle or late January, but only until then, accordingto an industry official close to the situation.

The comments about the NFIP were made as the Senate starts worktonight on a proposed aid package for victims of Superstorm Sandythat includes a 50 percent increase in the NFIP's borrowingauthority.

The Senate is taking up the measure as behind-the-scenes talkscontinue on how to avoid the “fiscal cliff,” the package of taxhikes and budget cuts that go into effect Jan. 1 unless contrarycongressional action is taken to forestall them.

Jimi Grande, senior vice president of federal and politicalaffairs for the National Association of Mutual Insurance Companies,says, “The increase in borrowing authority for the National FloodInsurance Program continues to be caught up in the broader debateover how to address the looming fiscal cliff and respond toSuperstorm Sandy.”

He adds, “The NFIP needs to meet its obligations to those whosuffered flood losses during Sandy, and we remain confidentCongress will vote to increase its borrowing authority prior to theNFIP reaching its limit.”

Charles Symington, senior vice president of government affairsand federal relations for the Independent Insurance Agents andBrokers of America, says, “We hope Congress will quickly act toincrease the borrowing authority for the NFIP in order to ensurethat consumers, all of which have paid their premiums responsiblyin order to have active NFIP policies, receive the claims checksthey are due.””

However, there is deep concern within industry and members ofCongress from affected states that that regardless of how much aidto Sandy-afflicted states are provided, the bill will bedead-on-arrival in the House.

A Washington representative of National Flood Services, theKalispell, Mont. firm that handles the back office forWrite-Your-Own insurance companies, says it appears that WYOcompanies are cleared to pay claims to Sandy victims at thistime.

Officials of the Federal Emergency Management Agency did notrespond to requests for comment.

The bill as cleared for Senate floor action last Friday providesthe entire $60.4 billion requested by the Obama administration andstrongly supported by affected states.

It includes an increase in the NFIP borrowing authority from$20.775 billion to $30.4 billion.

The Senate voted 91-1 late Friday afternoon to clear the entirepackage—supported strongly by all states impacted by Sandy,especially New York and Jersey—for floor action.