NU Online News Service, May 24, 9:25 a.m.EDT

The Senate passed a 60-day National Flood Insurance Programextension as part of an agreement between Senate Majority LeaderHarry Reid, D-Nev., and Sen. David Vitter, R-La. to move afive-year program extension bill to the Senate floor.

The agreement between Reid and Vitter was the culmination ofthree days of talks. Earlier this week, Vitter tried to jumpstartaction on a long-term extension by seeking to attach it tolegislation now being debated on the Senate floor that would extendand amend the Food and Drug Administration's user fee program.

The agreement was reached yesterday, but a snag developed todayover language that will be included in the 60-day extensionlegislation that must be passed before the Senate leaves thisweek.

Sen. Tom Coburn, R-Okla., demanded language in the extensionbill that would immediately phase-out subsidieson flood insurance for second homes and vacationhomes.

A provision mandating that "actuarial rates" on these propertiesbe phased in over four years is included in S. 1940, the Senate'sfive-year extension, according to an industry lobbyist. However,Coburn wanted the start date for that provision be immediate.

The 60-day extension passed by the Senate today includes thatprovision.

The current NFIP authorization expires May 31.

The House passed a 30-day NFIP extension on May 17 that includedincremental reforms that would look into privatization of aspectsof the program. The Senate declined to act on it because somemembers could not support those reforms.

The House passed its long-term reauthorization legislation, H.R.1309, last July. The House is out this week, but returnsnext Wednesday, May 30, from its Memorial Day recess.

Industry officials sounded optimistic that a five-year extensionmay be within sight.

Charles Symington, senior vice president of government affairsfor the Independent Insurance Agents and Brokers of America, said,"While we appreciate last week's action by the House, we urge themto quickly pass this new 60 day extension upon their return fromMemorial Day recess to avoid an expiration of the program.

"The deal discussed on the Senate floor…could prove to be thepath forward on this lengthy reform effort, and the IIABA stronglysupports the agreement," he said.

Mike Becker, assistant vice president of federal affairs of theNational Association of Professional Insurance Agents called theReid/Vitter deal "a big step in the right direction."

Matt Gannon, assistant vice president of federal affairs for theNational Association of Mutual Insurance Companies, wascautious.

"The deal reached today is another promising development, but itdoes not ensure that the NFIP will not lapse on May 31," Gannonsaid. 

Gannon said the House needs to accept the 60-dayextension, "but their comments last week signal that there is noguarantee that they will."