NU Online News Service, July 13, 2:20 p.m.EST

Insurance industry trade groups today lauded the decision of theHouse to pass legislation reauthorizing the National Flood Insurance Program for fiveyears—and urged the Senate to act promptly on the measure.

The program expires September 30.

"The House has done its part to address this issue," says JimiGrande, senior vice president of federal and state affairs for theNational Association of Mutual Insurance Companies (NAMIC). "Theball is now in the Senate's court and the clock is ticking."

Mike Becker, director of federal affairs for the NationalAssociation of Professional Insurance Agents (NAPIA) says, "It willremain a priority for PIA to maintain our effort in the Senate toensure they continue their work."

He said it is "critical the Senate leave adequate time to workout any differences with [H.R. 1309] well before the NFIP'sexpiration in September."

Becker also cited the decision of the House to overwhelminglydefeat an amendment by Rep. Candace Miller, R-Mich., which wouldhave ended the program as of the end of 2011.

"The critical importance of the NFIP was underscored by Congressin their overwhelming defeat" of the Miller amendment, Becker adds."The program protects more than five million Americans andterminating it with no viable alternative would have been unwisepublic policy."

Leigh Ann Pusey, president and chief executive officer of theAmerican Insurance Association (AIA), says, "The certainty andstability of this program is an essential component of protectingthe homes and businesses that may incur losses as a result offlooding."

She says the AIA hopes the Senate will quickly enact similarreforms.

The Independent Insurance Agents and Brokers of America (IIABA)especially noted the rejecting by the House of an amendmentproposed by Rep. Jeff Flake, R-Ariz., that would have stripped outa provision adding business interruption and additional livingexpense coverage to the program if certain conditions were met.

"These coverages are critically important to consumers and smallbusinesses and the IIABA strongly supports their inclusion in theFlood Insurance Reform Act," says Charles Symington, IIABA seniorvice president of government affairs.

The Property Casualty Insurers Association of America (PCI)applauded a decision to add an amendment to require the Federal Emergency ManagementAgency to find write-your-own companies to take over 832,000 floodpolicies formerly underwritten by State Farm and its 17,000agents.

It requires FEMA to reduce the number of flood insurancepolicies that are directly managed by the agency to not more than10 percent of the total number of flood insurance policies inforce.

It would also require FEMA to refuse to accept future transfersof policies to the NFIP Direct program.

"The amendment is an important measure to protect NFIPpolicyholders and captive insurance agents while preventing anexponential growth of the federal government's management of floodinsurance," says Ben McKay, PCI senior vice president of federalgovernment relations.

But Phil Supple, a spokesman for State Farm, whose agents wouldbe most affected by the amendment, says, "This amendment is notabout getting the federal government out of the flood insurancebusiness. It is one group of insurance companies trying to poachbusiness from a separate group of agents."

"Not only does the amendment keep the federal government in theflood insurance business, but it also could cost up to $250 millionin new federal spending on behalf of these other companies,according to FEMA," Supple adds.