Filed Under:Agent Broker, Agency Management

House Sandy Aid Vote on Friday Is Only for NFIP Borrowing Authority Increase

The House vote Friday on aid to Superstorm Sandy victims will only be for raising the cap on the National Flood Insurance Program's borrowing authority.

And that will only occur because federal officials have told members of Congress that money to pay claims for Sandy and other storms will run out as early as Monday, PC360 has learned.

The information was revealed in a statement late Wednesday from Dave Miller, the Federal Emergency Management Agency's associate administrator for the Federal Insurance and Mitigation Administration, which indicated that the agency is rapidly running out of funds.

The FEMA memo said that absent an increase in the NFIP borrowing authority, “payments on more than 115,000 claims in states across the country may be delayed until Congress increases the NFIP borrowing authority.”

Miller said in the statement that use of NFIP monies “are being closely monitored based on actual and anticipated claims.”

The House bill will propose to increase the NFIP borrowing cap from the current $20.775 billion to $30.4 billion. That was included in the request for $60.4 billion in aid sent to Congress by President Obama in early December.

According to a number of members of Congress, Boehner had agreed to act on additional Sandy aid immediately after the House vote to enact legislation averting the fiscal cliff late Jan. 1, but decided not to early Jan. 2.

That precipitated an angry reaction from Northeast congressman, as well as New York’s Gov. Andrew Cuomo, a Democrat, and New Jersey Gov. Chris Christie, a Republican.

It was only then that Boehner agreed to the Friday vote, but did not disclose the substance of what would be voted on.

That only came to light today.

A second House vote on Jan. 15 will be for additional aid for Sandy victims.

An industry official says it is inappropriate to say that the $9 billion being voted on tomorrow is actual “aid,” because it is only authority for the NFIP to borrow money; it is not an appropriation.

Industry officials also acknowledge that it is unclear how much additional support for Sandy victims the House will approve when it considers legislation appropriating funds for other aid sought by Northeast congressman on Jan. 15.

Jimi Grande, senior vice president, federal and political affairs for the National Association of Mutual Insurance Companies, said NAMIC “welcomes” the House vote to increase the NFIP borrowing authority, and said he would “urge the Senate to swiftly follow suit to ensure the federal government meets its obligation to tens of thousands of NFIP policyholders”

He noted that extending the NFIP borrowing authority was never opposed by either party, “and any further delay will extend the hardships of the victims of Sandy.”

At the same time, he asked both the House and Senate to add to the bills providing additional Sandy aid provisions that would call for improved building codes. to mitigate the damages and costs of future natural disasters.

“Strong building codes protect property, save lives and ultimately reduce taxpayer exposure to natural disasters, and Congress can encourage their use by adopting the Safe Building Code Incentive Act as part of the Sandy relief bill,” Grande says.

However, he did acknowledge that the House has not indicated that it will do so, and that the Senate bill passed last Friday did not contain such language.

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