NU Online News Service, Sept. 10, 1:46 p.m. EDT

WASHINGTON–A short-term National Flood Insurance Program (NFIP) extension to December is problematic because Congress' schedule toward the end of the year is uncertain and another lapse could result, an agent association representative said.

The NFIP is currently facing a Sept. 30 expiration, and trade groups are sounding the alarm as Congress returns for a month-long session.

Mike Becker, national director of federal affairs for the National Association of Professional Insurance Agents (PIA), said that currently there is a possibility that Congress will consider an extension of the flood program through December 31, 2010.

"We believe this is problematic," he cautioned.

He explained that it "is not certain" that there will be a substantive lame-duck session after the November elections.

"Passing an NFIP renewal that only runs through December 31 carries a high risk that the program will suffer yet another multi-week expiration that runs into January," Mr. Becker said.

He said PIA suggests the best solution is for the Senate to now pass H.R. 5114, the Flood Insurance Reform and Priorities Act of 2010, which has already been passed overwhelmingly on a bipartisan basis in the House.

"H.R. 5114 extends the program for a full five years and makes key substantive reforms," Mr. Becker said.

"The main issues of contention regarding the flood program–its Katrina-related debt and the desire by some to add wind coverage to the program–are not addressed in H.R. 5114 and can be dealt with in separate bills next year," he said.

Failure to extend the program or for the Senate to act on long-term reform and reauthorization legislation will cause disruptions to the real estate market and undermine confidence in the flood program, said Mr. Becker.

Mr. Becker made his comments as Congress prepares to work Monday with a large agenda, and plans to leave by Oct. 13,

David Sampson, president and CEO of Property and Casualty Insurers Association of America, agreed with Mr. Becker. "Reauthorizing the National Flood Insurance Program needs to be a top priority for Congress when they return from recess," he said. "Congress has already allowed four NFIP lapses this year."

He added, "This is a dangerous political game that leaves millions of Americans vulnerable to severe weather."

Mr. Sampson also cited the devastating flood waters that ripped through Texas and Oklahoma this week. "That serves as yet another reminder that the NFIP reauthorization cannot be postponed," he said.

Mr. Becker cited "many negative effects" from the uncertainty that results every time Congress allows the program to expire, then renews it for a period of weeks or even just days.

He said that, when expirations occur, real estate closings get delayed and property markets slow to a halt.

"If the goal of lawmakers is to spur economic recovery, continuing this pattern of expirations followed by short extensions of the flood program is counterproductive," he said.

The repeated failure of Congress to provide an adequate extension of the NFIP is also beginning to erode participation by Write Your Own carriers, he added.

Special Reports /

Possible NFIP Extension To Dec. Not Enough, Industry Rep. Warns

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