Two-Year NFIP Extension Better Than Nothing, But Industry Still Wants Five

Insurance-industry officials say a two-year National Flood Insurance Program (NFIP) extension, as proposed recently by the Federal Emergency Management Agency (FEMA), is better than the current pattern of short-term extensions—but some associations say they would still rather see action on a five-year extension with program reforms.

In an April 24 comment in reaction to the FEMA letter to Congress calling for a two-year extension, the Independent Insurance Agents and Brokers of America (IIABA) supported the FEMA proposal.

But officials of the National Association of Professional Insurance Agents joined the American Insurance Association and the National Association of Mutual Insurance Companies in voicing support for more certainty: a five-year extension.

The comments followed a brief conference call FEMA officials had with interested parties, including representatives of the P&C insurance industry.

The FEMA briefing followed its message to Congress asking for support for a two-year extension. The letter was sent because yet another short-term extension of the program is scheduled to expire May 31.

The current program has been operating on extensions—with some breaks in the program—since Sept. 30, 2008.

Charles Symington, senior vice president of government affairs for the IIABA, says the IIABA supports FEMA's call for a multiyear extension of the NFIP.

“This program is simply too important to the marketplace and consumers to be facing the threat of expiration every three to six months,” Symington adds.

The Senate bill has no name. The House last July passed by overwhelming vote H.R. 1309, the “Flood Insurance Reform Act of 2011.”

The bill, sponsored by Rep. Judy Biggert, R-Ill., would, among other provisions, extend the NFIP until Sept. 30, 2016.

The Senate Banking Committee reported to the floor a similar bill in early September. Floor action has been pending since then.