After two flood-insurance legislation efforts failed in the Senate, an industry official says a short-term extension will be about all the industry will get before the current National Flood Insurance Program authorization expires Sept. 30.
Charles Symington, senior vice president of government affairs for the Independent Insurance Agents and Brokers of America (IIABA), says, "We appreciate both the House and Senate for their work on a long-term extension and reform of the National Flood Insurance Program, and we strongly support reforming the program."
However, he adds, "At this point the simple fact is there may not be enough time left on the legislative calendar to get a reform bill through the Senate and reconciled with the House bill before the program's expiration on Sept 30."
"We therefore urge Congress to quickly consider a short-term extension to avoid any marketplace disruption while allowing Congress to finalize its reform legislation."
The Senate recently scheduled markup of legislation substantively different than that proposed by the House. But it was delayed until after Congress returns to work Sept. 7, as legislators decided to go home after the tension-filled effort to push through legislation raising the debt ceiling.
Sen. Tim Johnson, D-S.D., then failed to get through, on an expedited basis, a bill that would extend the current program until Dec. 31.
Senate Democrats approved the legislation but Republicans blocked it, according to several officials. It would not have mattered anyway since House members fled Monday after voting on the debt ceiling.
An extension would mark the ninth time the current program has been extended since the original authorization ran out Sept. 30, 2008. Several times last year the ability to add new homes to the rolls and do other administrative chores was suspended when the program lapsed.
NIMA, SLIMPACT Harmonization?
Prodded by a leader of the House Financial Services Committee, the National Association of Insurance Commissioners (NAIC) and the National Conference of Insurance Legislators (NCOIL) are stepping up their efforts to harmonize different mechanisms for implementing the surplus-lines reform law.
NAIC officials cited, for example, that the allocation methodology may be a place to look for similarities.
George Keiser, NCOIL president and a Republican state representative from North Dakota, proposed the new initiative to harmonize the competing mechanisms for implementing the new law.
Supported by the NAIC, a number of states have adopted a model, the Nonadmitted Insurance Multistate Agreement (NIMA), as the model law best suited to implement the federal law, the Nonadmitted and Reinsurance Reform Act (NRRA).
Other states, however, have adopted SLIMPACT, or the Surplus Lines Insurance Multistate Compliance Compact. This compact, supported by the industry, is being facilitated by NCOIL.
Others, including most of the 10 largest states in terms of surplus-lines premium revenue, have adopted implementation procedures that provide no mechanism for sharing revenues based on the fact that the risk being insured is in another state.
An official of the National Association of Professional Surplus Lines Offices (NAPSLO) testified at the House hearing that the surplus-lines industry is "threatened" by the patchwork way in which the law is being interpreted by the states.
At the hearing Rep. Judy Biggert, R-Ill., chair of the Insurance, Housing and Community Subcommittee of the House Financial Services Committee, asked: "Why doesn't NAIC work with the SLIMPACT model instead of creating another model, NIMA?"
In response, both NAIC and NCOIL officials indicated that they are prepared to harmonize at least some of the provisions in the two competing proposed compacts.
In response to a request from NU, NAIC officials say that there "may be operational issues that SLIMPACT and NIMA states can try to harmonize." NAIC officials say that regulators representing both NIMA and SLIMPACT states will be meeting shortly in Philadelphia, and the NAIC also invited state legislators to a dialogue.
NAIC officials say they are "committed to seeing if there are common-sense ways to reduce the compliance burden on brokers while maintaining the necessary level of reporting and supervision of surplus-lines transactions."
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