Flood Bill Possibly Reauthorized

Leadership of the United States Senate is poised to reconsider the National Flood Insurance Program (NFIP) reauthorization bill (S-2284) this or next week, according to an insurance industry source.

The bill was passed last October by the Senate Banking Committee.

It forgives the $17.3+ billion debt of the national flood program related to Hurricanes Katrina.

It does not hold a provision allowing the program to offer wind coverage to policyholders, passed the Senate Banking Committee in October 2007.

In exchange for paying off the program’s debt, the Senate bill called for updating flood maps and extension of a pilot program enabling the NFIP to charge actuarially-sound rates.

Previously, that provision, plus others, blocked action on the bill earlier as Louisiana & Mississippi Senators feared that the mandate to charge actuarial rates would make the program unaffordable to many of their residents.

In an April letter by the Louisiana and Mississippi senators, a new option materialized. If the Senate agrees to address their concerns and allow floor amendments to S-2284, the bill could be considered.

Industry trade groups still have concerns about the House bill.

For example, National Association of Mutual Insurance Companies continues to advocate for the legislation in its current form.

It does not wants any amendments—such as the inclusion of wind coverage, that would increase the exposure and liability of the program.

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(Sources: National Underwriter, May 2, A.D. Postal)