WASHINGTON–Two separate hearings will be held on flood insurance issues by House committees next Tuesday, one clearly designed to put added pressure on insurers to promptly settle claims still outstanding from Hurricanes Katrina and Rita in 2005.

The other hearing, before a subcommittee of the House Financial Services Committee, will review the flood insurance reform legislation that passed the House overwhelmingly last year but failed to get through the Senate.

Commenting about the forward-looking hearing on how the NFIP legislation should be updated, an official of the National Association of Mutual Insurance Companies said that any flood reform bill must include provisions that bring more people into the program and make rates more actuarially sound.

The first hearing is scheduled to explore “public and private sector insurance practices” in settling claims stemming from Hurricanes Katrina and Rita.

It will be held by the Subcommittee on Oversight and Investigations of the House Financial Services Committee and the Homeland Security Subcommittee on Management, Investigations and Oversight.

“The subcommittees will specifically examine the National Flood Insurance Program, the interaction between the NFIP and private insurers, and the allocation of wind versus water insurance claims in light of preliminary findings from the Government Accountability Office and Department of Homeland Security, Inspector General reports,” the two subcommittees said in a joint release.

“It is clear that the 2005 hurricanes [Katrina and Rita] exposed serious flaws in the insurance coverage and claims adjustment processes,” said Rep. Mel Watt, D-N.C., chairman of the House panel.

Mr. Watt said, “This second hearing will continue responsible efforts by Congress to get the facts we need to insure that those flaws are corrected and that victims of future catastrophes are better protected.”

The chairman of the House Homeland Security Committee is Rep. Bennie Thompson, D-Miss., whose state was also hard hit by Hurricanes Katrina and Rita.

The hearing is also being pushed by Rep. Gene Taylor, another Mississippi Democrat whose home was destroyed by Hurricane Katrina. Rep. Taylor sued State Farm over the handling of his claim. He has been a vocal critic of the industry as well as an original sponsor of legislation that would repeal insurers' McCarran-Ferguson Act antitrust exemption.

The second hearing, before the House Financial Services Committee's Housing Subcommittee, will explore legislation co-sponsored by current committee Chairman Rep. Barney Frank, D-Mass., which passed both committees and the full House last year.

At this time, no date has been set to re-pass the bill.

Justin Roth, a senior director at NAMIC, said the trade group's members support the bill. “We believe that Chairman Frank's bill goes a long way in accomplishing both of our primary goals for this legislation.”

He said NAMIC thinks that all second homes should be moved to actuarial rates. “It is unsustainable for American taxpayers to subsidize flood coverage for those individuals who chose to build second homes in flood zones.”

He said the Frank bill also helps the NFIP become more financially viable, which will help insure its continued existence.”

Special Reports /

New House Hearing To Push Hurricane Settlements

Related Stories

Recommended For You