A key member of the Senate Banking Committee urged major changes in the National Flood Insurance Program (NFIP) during a June 9 hearing.
The comments by Sen. Richard Shelby (R-Ala.), ranking minority member of the committee, heighten concerns within the industry that Congress may not be able to complete work on a long-term reauthorization of the program before the current authorization expires Sept. 30.
In his comments, Shelby cites numerous concerns with the program. He says, "Every aspect of the program must undergo significant revision for it to survive and continue on a sustainable path."
Shelby points to the Write Your Own insurance companies, noting that the Government Accountability Office has recommended that the Write Your Own program have more transparency and accountability. "This is something we should pursue," he says. He adds that the "committee also should examine the types of properties the flood-insurance program is covering to ensure that its resources are spent effectively."
Craig Fugate, the administrator of the Federal Emergency Management Agency (FEMA), which manages the flood program, signaled in testimony that during a period when the federal budget is under intense scrutiny, the Obama administration also sees a need, after 42 years of operation, to reduce the scope of the program. "After more than a decade of seeking input, identifying issues and undergoing studies, FEMA believes that the time has come to undertake a critical review of the NFIP," he says.
And, in a key statement, Fugate adds: "As members of this committee and others in Congress consider NFIP reform, the Department of Homeland Security and the administration are prepared to assist those efforts as appropriate."
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