NU Online News Service, May 28, 11:35 a.m. EDT
The National Flood Insurance Program will lapse June 1 because of congressional inaction, meaning insurance agents will not be able to provide new or renewed insurance policies under the Federal Emergency Management Agency's Write Your Own Program.
Sen. Harry Reid, D-Nev., announced Thursday night that the Senate will recess until June 7 without acting on legislation that would extend the program.
The NFIP's current authorization expires May 31.
"This is now the fourth time Congress will have let this program lapse, and it's beginning to feel like 'Groundhog's Day,'" said Blain Rethmeier, a spokesman for the American Insurance Association.
"The country has seen record flooding this spring," he said.
"Congress needs to pass a long-term extension because homeowners living in flood-prone regions of the country don't have anywhere to turn should another major flood occur during this Congressional recess," he added.
Bills recently introduced in both the House and Senate would have extended the current program: the House through Sept. 30 and the Senate until Dec. 31.
Separate legislation, The Flood Insurance Reform Priorities Act of 2010, H.R. 5114, would reauthorize the program for five years (//frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h5114rh.txt.pdf).
It would also reform the existing program by increasing NFIP coverage limits, phasing in actuarial property rates, phasing out premium subsidies for second and vacation homes, and making business interruption and additional living expense coverages available at actuarial cost.
This bill was reported out of the House Financial Services Committee and is awaiting further action by the House.
It has no companion bill in the Senate.
Allowing the NFIP to lapse at the start of the 2010 hurricane season is "irresponsible," according to the National Association of Mutual Insurance Companies.
"Once again, the NFIP has become a victim of politics that have nothing to do with the program itself," said NAMIC's federal affairs director, Kathy Mitchell. "Allowing the NFIP to lapse just as the 2010 storm season is beginning shows a troubling lack of judgment on the part of Congress."
She added that "millions of homeowners and businesses will be left vulnerable to storm losses because of Congress' failure to act at one of the worst possible times."
The Write Your Own Program, according to FEMA, is a cooperative undertaking of the insurance industry and FEMA that allows participating property and casualty insurance companies to write and service the Standard Flood Insurance Policy in their own names.
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