NU Online News Service, April 6, 3:43 p.m. EDT

WASHINGTON–Insurance industry officials said they expect when Congress resumes it will act quickly to renew the expired National Flood Insurance Program.

They also said they believe lawmakers will deal with other catastrophe issues on returning from their holiday recess.

Meanwhile, the Kansas Insurance Department said in a consumer alert today that the National Flood Insurance Program funding halt could cause short-term problems for consumers waiting to close on the sale of a property within a designated Special Flood Hazard Area.

"The National Flood Insurance Program's federal authorization expired on March 28," Kansas Insurance Commissioner Sandy Praeger said in a statement. "NFIP ceased issuing new policies or renewing policies then. However, consumers with current policies are still covered."

On April 21 a subcommittee of the House Financial Services Committee is scheduled to hold a hearing on controversial legislation that would add wind damage coverage to the flood program.

According to insurance industry representatives, that will be followed the next day by the start of the markup of legislation calling for a long-term reauthorization and reform of the NFIP.

In a letter sent late Monday to the Senate leadership, the Financial Services Roundtable urged that chamber to pass legislation providing for "an immediate, retroactive extension" of the NFIP.

The letter said the "expiration of the program on March 28 has left thousands of homeowners and small businesses in limbo." The letter was signed by Steve Bartlett, president and CEO of the FSR.

It added, "Until Congress acts to reauthorize the program, insurance companies cannot issue new policies, increase coverage on existing policies, or issue renewal policies."

The program expired because Republicans in the Senate declined to pass legislation that had earlier passed the House extending the program until May 31 while talks continued on legislation extending the program until Dec. 31.

The bill in question also contained provisions extending unemployment insurance and postponing a 21 percent cut in pay provided doctors under the Medicare program.

The hearing involving flood insurance will be before the Housing Subcommittee of the FSC. It will discuss H.R. 1264, the Multiple Peril Insurance Act, legislation introduced last year by Rep. Gene Taylor, D-Miss.

Rep. Taylor has been pushing for several years to add wind to the NFIP. This legislation would do that as well as make other reforms to the NFIP program.

These reforms would include providing incentives for states to establish stronger rules regarding construction of homes and businesses in flood-prone areas, as well as closing loopholes in state law that allow insurers to escape any responsibility for claims from damage caused by both flood and water.

According to officials of the National Association of Mutual Insurance Companies, the full committee will turn its attention the next day to legislation that would provide a long-term extension of the NFIP.

"These two bills provide a clear choice for members of Congress," said Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies.

"One bill will reform the National Flood Insurance Program and give it the solid financial footing to continue providing protection to homeowners and businesses," Mr. Grande said.

"The other would add a massive new exposure to windstorm damage, asking more Americans to subsidize coverage for beach houses and high-risk coastal properties, while at the same time undermining the private market," he added.

Special Reports /

Congress Seen Acting Quickly On Flood Program After Recess

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