WASHINGTON–Two insurer groups are opposed to a proposal made last night to extend the current National Flood Insurance Program (NFIP) until April 30, 2009, saying the solution is a bipartisan bill that already has been passed in the Senate.
Rep. Barney Frank, D-Mass., chairman of the House Banking Committee, introduced the bill, as authorization for the current program expires Sept. 30 and an impasse has developed as the House and Senate seek to resolve conflicting bills passed earlier by each body.
Talks have been stymied because the bipartisan Senate bill calls for paying off the $17 billion debt the program incurred through Hurricanes Katrina and Rita in 2005. It is opposed in the House because House rules bar an appropriation without an offset–either cuts in existing programs, or a new tax.
Both the Property Casualty Insurers Association of American and the National Association of Mutual Insurance Companies, however, issued statements opposing the extension.
Cliston Brown, a spokesman for PCI, said, "With the turmoil in our financial markets and an energy crisis that requires the full attention of Congress, we can ill afford to delay full reauthorization of this program for seven months."
Jimi Grande, NAMIC vice president for federal and political affairs, agreed. "A short-term extension without reforms to the NFIP would be a mistake," he said.
At the same time, this proposal, if approved by Congress, would leave open the possibility that a new president could approve adding wind to the program–something President Bush and the Senate oppose.
Adding wind coverage is also opposed by the insurance and reinsurance industries, which have lobbied heavily against it.
Sen. John McCain, R-Ariz., the Republican presidential candidate, also has voiced strong opposition. Sen. Barack Obama, D-Ill., the Democratic presidential candidate, however, has indicated he would support adding wind coverage.
The wind provision has little support in the Senate, which rejected an amendment adding wind to the coverage, 73-19, when it acted on its version of legislation reauthorizing and reforming the NFIP.
Rep. Frank said last night that the legislation to extend the program for seven months would give House and Senate negotiators time to complete work on a permanent extension of the program and to assess implications of the 2008 hurricane season.
"I am disappointed that a permanent solution is not before us, but we can and should extend the program while we work on that final bill," Rep. Frank said.
PCI's Mr. Brown said the problem with a short-term extension is that it would create "a cloud of uncertainty, and kicking the can down the road now means that Congress will have to start from scratch next year–when it will be dealing with numerous other contentious issues."
He said there is "currently a widely supported, bipartisan bill that passed the Senate by a huge majority, and we would hope that Congress would move now to get the NFIP back on track and usher in fiscal solvency for the program."
Mr. Grande of NAMIC "urged Congress not to go home without completing the important work to reform the NFIP."
He added that reform of this "vital program is essential, especially now–we've had extensive flooding this year and are in the middle of a hurricane season."
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