House committee votes to buoy National Flood Insurance Program
The National Flood Insurance Program moved one step closer to an overhaul that one insurance industry official called a “meaningful long-term extension.”
With flood waters raging in the Mississippi River and the federal program, covering about 5.6 million properties set to expire Sept. 30, the U.S. House Financial Services Committee passed a bill calling for a five-year extension. The full House is expected to take up the bill in the near future.
The Flood Insurance Reform Act of 2011 will provide “much-needed improvements” to the program, which she called “an essential component” of protecting the homes and businesses of U.S. citizens that may incur losses as a result of flooding, said Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), representing about 300 property-casualty insurers.
Pusey noted that “necessary improvements” included in the bill include risk-based premiums, reductions in price subsidies and increases in the program’s capacity.
The NFIP has earned a handful of short-term extensions over the last two years, as Congress has kept delaying long-term action on the program. Twice last year, the program lapsed, preventing property owners from being able to buy or sell properties deemed a flood risk. In both cases, coverage became retroactive when an extension was approved.
“Given the current flooding taking place on the Mississippi River,” Pusey said, “it is especially critical to get a long-term extension of the program in place so that this debate can move beyond Congress and residents in flood-prone areas can have the stability in the program they so desperately need to insure their homes and businesses.”
The program is 17.5 billion in debt, a situation that is giving Republicans seeking cost-cutting measures a reason to eliminate the program, which others say promotes risky development of flood-prone areas.
But the bill sponsored by Republican Rep. Judy Biggert of Illinois garnered unanimous approve of the House committee.
The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) today issued the following statement lauding passage of H.R. 1309, the “Flood Insurance Reform Act of 2011,” in the U.S. House of Representatives Committee on Financial Services. The legislation would extend the National Flood Insurance Program (NFIP) for five years and make needed reforms to the program to help put it in secure financial footing for the future. The bill now goes to the House for approval.
The five-year extension of the NFIP included in House Resolution 1309 is of the “utmost importance” to put the program on “sound financial footing,” according to Charles Symington, senior vice president of government affairs for the Independent Insurance Agents & Brokers of America., representing 300,000 agents and brokers.http://ifawebnews.com
Similar Posts:
- An Update on Flood Insurance
- Insurers Fight Over Dropped State Farm Flood Insurance Policies
- Today’s News: Health Care Law Raises Abortion Questions, Pre-Existing Conditions Health Pools Begin and Flood Insurance Overhaul Underway
- Flood insurance premiums likely to rise if federal legislation passes
- Homeowners Reminded to Consider Flood Insurance
