New House Bill Would Extend Flood Program Without Change

NU Online News Service, July 9, 4:19 p.m. EDT

WASHINGTON–Legislation was introduced in the House today to reauthorize and extend the current National Flood Insurance Program past the current Sept. 30 cutoff to March 31, 2010.

If enacted, the legislation introduced by Rep. Barney Frank, D-Mass., chairman of the Financial Services Committee, and Rep. Maxine Waters, D-Calif., chairman of the panel's Housing Subcommittee, would extend the program for the fourth time.

The need for extensions has resulted from an impasse over how the program should be reformed between members of the House and Senate.

It comes as Congress is concentrating on legislation dealing with healthcare reform, climate control, the budget for the fiscal year that begins Oct. 1 and initiatives that would beef up oversight of the financial services industry.

Specifically, House members want provisions in the bill that would provide federal backstops to state windstorm reinsurance programs as well as add wind coverage to the program.

The Senate overwhelmingly opposes adding such provisions as it is too costly and gets government too involved in the insurance industry.

The insurance industry unanimously opposes adding wind coverage to the program, but there is disagreement as to whether the federal government should support state-backed reinsurance programs.

In separate statements, the Independent Insurance Agents and Brokers of America and the Property Casualty Insurers Association lauded the Democratic leadership of the House Financial Services Committee for introducing legislation extending the current program again.

"This extension is just a temporary fix, but it is a significant and welcome development for millions of homeowners and small businesses who count on the NFIP for protection in the event of flooding," said Charles E. Symington Jr., senior vice president for government affairs at the IIABA.

"If the NFIP is allowed to expire, millions of consumers would be left vulnerable the next time a flood devastates a community," he added.

David A. Sampson, PCI president and CEO, added, "Expiration of the program, which would happen in September without an extension, could have dire consequences for policyholders and for the nation's economy in general."