Editor's Note: This article originally appeared in National Underwriter, P&C.

After a lawmaker agreed to drop his objections, the Senate voted final approval on March 3 for legislation that included a reauthorization of the National Flood Insurance Program (NFIP).

Senate action followed an agreement by Sen. Jim Bunning R-Ky., to end his filibuster and allow the Senate to move forward with H.R. 4691, a composite spending measure that, in addition to reviving the NFIP until March 28, extended several other federal programs that had expired last Sunday.

Mr. Bunning had objected to the measure because it does not detail what revenues will be used to fund it.

FEMA posted a Write-Your-Own Bulletin W-10015 on its web site to help Write-Your-Own insurance companies deal with the rare two-day hiatus in the authorization for the NFIP and the fact that the re-authorization was not made retroactive.

In its notice, FEMA said that Congress is considering legislation that would make the program retroactive. But, due to the lapse, W-10015 provides special guidance as to how new policies are to be dated and can become effective.

A copy of the flood manual revisions and details of the reauthorization measure are online here.

Officials of the American Insurance Association said that in the wake of the temporary extension the Senate has begun consideration of a broader extensions package, which will extend the NFIP until Dec. 31, 2010.

The short-term extension will allow Congress to get the broader flood program bill through the legislative process, according to Blain Rethmeier, an AIA spokesman.

Approval for the bill extending the flood insurance program came on a 78-19 vote, and President Obama is expected to quickly sign the bill, according to officials of the Property Casualty Insurers Association of America.

"We applaud the Senate for recognizing the urgency in extending the National Flood Insurance Program," said David Sampson, president and CEO of PCI.

"This vitally important program protects over five million families across the country," he said.

"The recent debate in Congress underscores the need to bring greater certainty and stability to the flood program in 2010 and advance a long-term extension that ensures the program's fiscal soundness," he added.

An official of the Federal Emergency Management Agency said it hopes to finish work on a memo to Write-Your-Own companies offering guidance on the reauthorized program soon.

A PCI official clarified that the agency guidance is needed because the legislation extending the program is not retroactive -- but the FEMA guidance will address the gap.

At the same time, the spokesman, Harriette Kinberg, chief of the Industry and Public Relations Branch of the Federal Insurance and Mitigation Administration/Risk Insurance Division of the Federal Emergency Management Program, clarified that a "talking point" document issued by the agency last week in anticipation of a lapse in the program said the document incorrectly stated that flood insurance policies will expire and claims will not be paid during the lapse period.

In responding to the reauthorization, Mr. Rethmeier said, "This feels like living paycheck to paycheck .... At some point, this short-term extension game needs to stop and more meaningful reform needs to be enacted."

Other industry officials were also critical.

"This is only a short reprieve for the flood insurance program," said Mike Becker, director of federal affairs for the National Association of Professional Insurance Agents.

"Congress continues to pass short reauthorizations that fail to address the need to enact comprehensive reforms," he said.

In order to do that, he added, a longer authorization is necessary. "PIA believes that the next NFIP reauthorization should be for at least six months--with a one-year extension an even better way to ensure that there is enough time to accomplish meaningful reforms."

Mr. Becker added, "This episode illustrated what can happen if Congress continues to use NFIP reauthorization as a political football."

"Real estate closings can get delayed when mortgage holders require flood insurance, putting the financial security of millions of Americans at risk," he said.

"This can have a negative effect on the overall health of our economy," Mr. Becker said. "We agree that the flood insurance program needs common-sense reforms, but the reform process must be conducted in a manner that does not destabilize markets."

Matt Brady, a spokesman for the National Association of Mutual Insurance Companies, said, "We applaud the extension of the NFIP and hope that, given all that happened, Congress will work to enact a long-term extension for the program."

He noted that this was the second time in a row that the NFIP was allowed to expire for reasons that have nothing to do with the program itself.

"With the next deadline just a few weeks away, we believe this experience should serve as a reminder to make extending the program on a long-term basis with common-sense reforms a priority for the government," Mr. Brady said.

Arthur Postal is Washington Bureau Chief for National Underwriter, part of Summit Business Media's P&C Magazine Group, which includes Claims.

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