The National Flood Insurance Program is likely to run out ofmoney to pay Superstorm Sandy claims, meaning it will probably needCongress to authorize a loan, a FEMA official says.

“The claims numbers [from Superstorm Sandy] are staggering,”says Edward L. Connor, deputy associate administrator of theFederal Insurance and Mitigation Administration, a unit of theDept. of Homeland Security.

He says the “burn rate” at which the agency is going throughmoney will require it to use its $900 million in cash and itsremaining $2.9 million in borrowing authority by the end of themonth in order to pay claims generated by the storm.

Connor made his comments Wednesday during a meeting of theFederal Advisory Committee on Insurance convened by MichaelMcRaith, director of the Federal Insurance Office.

In a presentation there, he explained that the NFIP is “still indebt from Katrina. We are $17 billion in debt and only have $840million in cash, so it is going to be a very, very long haul.”

He said the event could be a total loss of $6 billion to $12billion, with perhaps as many as 143,000 claims. “It will behuge.”

He said the Federal Emergency Management Agency, whichadministers the NFIP, recently had a weekly conference call withstate commissioners and agreed to waive the proof of lossrequirement for payment of claims.

He also said he expects the agency will have to raise NFIP ratesup to 20 percent as a result of Sandy.

A spokesman for Rep. Judy Biggert, R-Ill., chair of theSubcommittee on Insurance, Housing and Community Opportunity of theHouse Financial Services Committee, says Biggert did not plan ahearing on the financial implications of Sandy before the end ofthe year.

But an industry official who asked not to be named says anyrequest for greater borrowing authority from Congress will have tostart with the Financial Services Committee. The HouseAppropriations Committee would also be involved.

The need to borrow money was predicted Nov. 2 by officials ofvarious private groups that seek to persuade Congress to movepromptly to deal with the country's catastrophe-risk issues in acoherent way.

And it is a waste of money, contends Rep. Earl Blumenauer,D-Ore.

“We must relocate people out of harm's way,” Blumenaur says. “Wedid not do it with Katrina and there will be pressures not to do itin the aftermath of Sandy.”

Blumenauer adds, “Part of this is financial. We are going tohave this fund exhausted.”

He says that, as a practical matter, “I don't think there is anydoubt that the insured-flood loss will far exceed the $3 billionborrowing capacity. It is beyond merely the financial. The extentof all the federal policies, disaster relief, flood coverage andinfrastructure spending will result in money being spent toput people right back in harm's way; we are working againstourselves.”

Blumenauer says a key issue is, “We have people drawn to coastalregions. That is where the most dramatic growth has occurred in thelast 50 years. We need to make sure that all of the tools at ourdisposal help make people safer, not just dealing with theirfinancial loss.”

Blumenauer says the issue has been a priority of his during his10 terms in office. “I am concerned about the human tragedy thatresults from someone who returns to a storm-ravaged property; theemergency responders who are in put harm's way because peoplerefuse to evacuate the areas of greatest risk.”

And, he says, “There is no good time other than now to try andsave lives, save property; save money.”