With time again running out and recent floodwaters just now receding in the Midwest, the Senate Banking Committee held hearing on the fate of the National Flood Insurance Program. Indeed, with fiscally hobbled NFIP again set to run out of funding this fall, the hearings took on a certain sense of urgency.
William Fugate, the administrator of the Federal Emergency Management Agency, which has oversight of the NFIP, outlined many of the problems with both the NFIP as currently structured and with the nature of flood risk in general.
Ranking Minority Member Sen. Richard Shelby (R.-Ala.) raised the prospect of privatizing the program. “I believe this Committee should consider ways to privatize portions of this program," he said. "We should transfer risk from the Program to the private sector to the maximum extent possible."
Yet, how Shelby's vision would reconcile with HR 1309, the Flood Insurance Reform Act, remains to be seen. Introduced by Rep. Judy Biggert, (R-Ill.), HR 1309 passed the House Financial Services Committee unanimously and calls for major changes to the programs but stops short of privatizing.
The National Association of Mutual Insurance Companies (NAMIC) called on congressional leaders to act swiftly to reform the NFIP. “The need for the National Flood Insurance Program has rarely been more clear than it is now, and the responsibility for ensuring the NFIP will be there for homeowners across the country rests with Congress,” said Jimi Grande, SVP of Federal and Political Affairs for NAMIC. “HR 1309 would enact common sense, fiscally responsible reforms to move the NFIP towards stronger financial footing while ensuring that every homeowner and business facing a flood risk can be protected. American Homeowners and taxpayers have already waited too long for the NFIP to be reformed. We urge members of both the House and the Senate to act swiftly to ensure that the NFIP will be there when it is needed.”
