A group of coastal-area congressmen plan to introduce legislation this week that would provide "all-perils" coverage for homeowners and small businesses under the National Flood Insurance Program.

The draft legislation would raise the limits of coverage currently paid under the NFIP and mandate that "actuarially sound" rates be charged.

Such a provision would probably be acceptable to the insurance industry, but given the fact the NFIP is currently in the hole by more than $23 billion, it is likely to be received with skepticism in Congress, especially in the Senate, lobbyists say.

The bill is the second piece of legislation being developed by members of Congress from coastal regions to deal with growing criticism of the insurance industry's handling of claims resulting from Hurricanes Katrina and Rita in 2005.

Legislation that would radically alter the industry's federal antitrust exemption under the McCarran-Ferguson Act is also being drafted by lawmakers from coastal areas in both the House and the Senate.

Plans for the all-perils measure were disclosed by Rep. Bobby Jindal, R-La., during an appearance before a group of health care insurance producers. Rep. Jindal did not have time to comment, but a copy of the draft legislation was obtained by National Underwriter from other sources.

The draft says Reps. Jindal and Gene Taylor, D-Miss., hope to introduce the bill this week.

A representative for Rep. Taylor confirmed the bill was being written, but declined to give a timeline for introduction. "It is still being drafted, and we are coordinating with other offices on both [the all-peril and antitrust exemption] bills," the official said.

Among other provisions, the all-perils measure would require local governments to opt-in by agreeing to building code standards designed to minimize damage from a hurricane to structures in the coastal areas.

The draft for the all-perils bill would limit coverage of residential properties to $500,000 for the structure and $150,000 for contents and loss-of-use living expenses. Business coverage would be capped at $1 million for the structure and $750,000 for contents and business interruption.

Under current law, flood insurance for homes is limited to $250,000 for the building and $100,000 for contents. For businesses, the limit is $500,000 for the structure and a similar amount for contents.

Legislation reforming the NFIP passed by the House last year would have raised the limits to $335,000 for residential structures and $135,000 for contents, and $670,000 for businesses with $500,000 for contents.

Last year's House bill also would have allowed loss-of-use reimbursement and provided business interruption coverage for the first time.

Special Reports /

All-Perils Cover Anchors Latest Reform Bill For Flood Insurance Program

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