Insurers Push for NFIP Extension Ahead of Expiration

Editor's Note: This article originally appeared in National Underwriter, P&C.

The property and casualty insurance industry is gearing up to battle for certainty for the National Flood Insurance Program (NFIP) when Congress returns for a short session Sept. 13.

The current authorization for the program expires Sept. 30, and there have been several lapses in the program since the authorization for the current program first expired in September 2008.

At that time, both the Senate and the House had passed comprehensive reform and five-year reauthorization bills.

But the House and Senate could never reconcile the substantively different bills.

It is unclear when Congress will adjourn in order to allow congressmen to campaign for re-election. The House has decided to leave Oct. 8 so its members can return home to campaign while the Senate has not yet decided on a date because of the huge backlog of appropriations and other legislation that remains.

Some lobbyists are saying that Congress might be forced to remain in session until at least Oct. 14.

"The Sept. 30 expiration looms for the NFIP, and it is definitely something Congress must address upon its return, especially if, God forbid, we have another natural disaster," said Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA).

Charles Symington, senior vice president for government affairs for the Independent Insurance Agents and Brokers of America (IIABA), stated, "Job number one when we get back into session, from the IIABA perspective, is extension of the NFIP."

He added, "Our agents and their customers across the country are very frustrated with the continued expirations of the program and it is absolutely essential that Congress act before Sept. 30."

He noted that there are plans to put the extension in the Homeland Security appropriations bill.

The most likely scenario, Mr. Symington said, is a stand-alone extension, although he noted everyone would prefer a long-term extension.

"At the very least, the program needs to be extended well into next year to allow a new Congress to focus on the issue as well as needed reforms for the program," Mr. Symington said.

Matt Brady, a spokesman for the National Association of Mutual Insurance Companies, suggested that "any number" of proposals may also find their way onto the agenda, from legislation to create a national catastrophe insurance fund -- dubbed the "Beach House Bailout" legislation by critics -- to legislation allowing the government to sell windstorm insurance.

"These proposals, rightly, have little support in Congress right now but could come into play if a major storm were to hit the U.S. and members of Congress see a need to react," Mr. Brady said.

The Property Casualty Insurers Association of America (PCI) sent out a statement noting that four weeks remain before the current authorization expires.

PCI President and CEO David A. Sampson said, "Congress has entered a dangerous cycle of short-term patches for the flood program. We need a viable, long-term reauthorization for the flood insurance program to protect families and our communities."

Arthur D. Postal is Washington Bureau Chief for National Underwriter, part of Summit Business Media's P&C Magazine Group, which includes Claims.