NU Online News Service, Oct. 1, 11:03 a.m. EDT

President Obama late Thursday signed into law legislation extending the National Flood Insurance Program until Sept. 30–averting what would have been another shutdown of the program.

Without the President's signature, the program would have expired at midnight Thursday. The NFIP has lapsed three times this year. It has become a political football because it is more than $18 billion in debt, as noted by David Sampson, president and CEO of the Property Casualty Insurers Association of America.

"While this bill was an important first step, Congress will still need to address meaningful NFIP reforms in 2011," Mr. Sampson said.

There is also broad disagreement over how far reforms should go, including the phasing in of market-based rates and whether wind should be added to the program.

The bipartisan extension bill, S. 3814, was sponsored by Senator David Vitter, R-La., and co-sponsored by Sens. Mary Landrieu, D-La.; Bill Nelson, D-Fla.; Lamar Alexander, R-Tenn.; Saxby Chambliss, R-Ga.; Kay Bailey Hutchinson, R-Tex.; and Johnny Isakson, R-Ga.

Leigh Ann Pusey, president and CEO of the American Insurance Association, noted that the latest extension is long-term, rather than the prior pattern of short-term extensions and lapses that have plagued the NFIP.

"With the program now in place for another year, there is now the opportunity to tackle the larger, more fundamental reforms with federal policymakers like NFIP subsidies and the mapping of flood plains," Ms. Pusey said.

The Independent Agents and Brokers of America (IIABA) issued a statement saying the extension "will provide much needed stability and security for the NFIP and its five and a half million policyholders."

But, Robert Rusbuldt, IIABA president and CEO, said it's also important to note "that our work with this program is far from over."

He said, "Congress now has a year to work on a long-term extension and much needed permanent reforms such as an increase in maximum coverage limits and the addition of optional business interruption insurance."

He also said that in the past Congress has traditionally extended the program for five year periods in order to provide stability for the marketplace.

"Today's signing will come as a relief for millions of Americans who could be affected by floods or just wish to buy or sell a home," said Jimi Grande, senior vice president of federal and political affairs for National Association of Mutual Insurance Companies (NAMIC).

"However, the extension only maintains the program 'as is.' The NFIP is in serious financial trouble, and a simple extension such as this one will not help make the program self-sufficient or sustainable."

NAMIC has called for a long-term extension of the NFIP coupled with specific reforms to improve its financial outlook, including a phasing out of premium subsidies for non-residential and secondary residences.

NAMIC has also called for the modernization of flood plain and elevation mapping, incentives for mitigation programs and stronger penalties for financial institutions that fail to ensure that borrowers obtain coverage for properties.

Special Reports /

Pres. Obama Signs 1-Year NFIP Extension

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