NU Online News Service, July 11, 5:03 p.m. EDT
The property and casualty insurance industry is sending a letter to members of the House urging them to reject a flood-insurance bill amendment that would phase out the program as of January.
The amendment, by Rep. Candace Miller, R-Mich., would also allow states to form interstate compacts to provide insurance in their regions.
The amendment is one of 25 approved for floor action by the House Rules Committee last Thursday.
Debate on the legislation, H.R. 1309, the Flood Insurance Reform Act of 2011, is currently scheduled for Wednesday, although it could slip, according to industry lobbyists.
In general, the bill reauthorizes the National Flood Insurance Program until Sept. 30, 2016.
The industry letter says repeal of the program would have a “devastating impact” on the citizens and businesses that rely on the flood protection program.
“Without affordable coverage, homeowners will be unable to protect their largest investment, leaving taxpayers on the hook for reconstruction costs,” the letter says.
It adds, “We think it is unwise to terminate a program that has helped and protected so many since its inception.”
“The unique nature of flood risk makes it virtually impossible to pool risk among a large enough population for private insurers to offer a viable and affordable insurance product,” the letter says. “At this time in our economy, intentionally creating disruption and concern for homeowners, businesses and the housing sector is a bad policy decision.”
The groups signing the letter include the American Insurance Association; the Financial Services Roundtable; the Independent Insurance Agents and Brokers of America; the National Association of Mutual Insurance Companies; the Property and Casualty Insurers Association of America; and the Risk and Insurance Management Society Inc.
Other signees include the American Land Title Association; the National Association of Realtors; the Institute of Real Estate Management; the International Council of Shopping Centers; the Manufactured Housing Institute; the Mortgage Bankers Association; the National Apartment Association; and the National Association of Home Builders.