House Extends Flood Insurance Program

In seeking an extension, Rep. Barney Frank, D-Mass., chair of the House Financial Services Committee, said more time is needed to work with the Senate on a comprehensive overhaul of the flood insurance program, which covers properties worth about $1 trillion in flood-prone areas.

The extension until March 31 is a compromise. Rep. Frank had sought a year's extension, to Sept. 30, 2010, but Republicans balked, agreeing only to six months, according to several insurance industry lobbyists.

The current extension expires Sept. 30–the end of the federal fiscal year–and Rep. Frank said that is not enough time to work with the Senate on a reformed and modernized program because of the press of other business.

A representative for Rep. Frank said it is unlikely the Senate will act on the legislation before it leaves for a month-long recess on Aug. 7, but he said he is certain the Senate will pass the bill before the current authorization expires next month.

The legislation by Rep. Matsui makes technical changes to the NFIP to take local, state and federal funding into account when determining flood zone designations.

"My legislation will ensure public safety remains our first and foremost goal, while assisting communities that are modernizing their existing flood protection systems by giving them definable milestones to meet," Rep. Matsui said in a statement introducing the bill. She added that the bill "will give communities clarity to help them restore or improve their flood protection systems."

In response to House action, Leigh Ann Pusey, president and chief executive officer of the American Insurance Association, said her members are "pleased that Congress continues to recognize the need to keep this program from expiring, and we look forward to the Senate taking action on the extension soon. It's critical that we make sure coverage remains available for citizens living in flood-prone areas."

Kathy Mitchell, federal affairs director for the National Association of Mutual Insurance Companies, added that "clearly, we cannot allow the NFIP to expire, which could be devastating to those policyholders who live in flood-prone areas and to the nation's already weakened real-estate markets."

David A. Sampson, president and CEO of the Property Casualty Insurers Association of America, said PCI "will continue to work with Congress on needed reforms to the program, a long-term reauthorization, and restoration of the program to fiscal soundness, which is the necessary solution for this vital program."