Hoping to persuade legislators to find a lasting resolution to the perpetually troubled and intermittingly lapsing National Flood Insurance Program (NFIP), the Independent Insurance Agents & Brokers of America (IIABA) sent a letter to congressional leaders.
Signed by IIABA President and CEO Robert Rusbuldt, and SVP Government Affairs Charles Symington Jr., the missive asks legislators to craft a long-term extension to the program, which has for the past four years survived on series of temporary extensions.
“These repeated expirations have caused confusion in the marketplace for consumers, agents, companies, and even regulators,” the letter states. “Residential and commercial real estate transactions in flood zones across the country face the prospect of coming to a virtual stop, as federally backed mortgage loans for properties in flood zones cannot be secured without this critical protection. Just as importantly, the expirations have called into question the very stability of the program as a whole among consumers, agents and companies.”
A lasting funding solution to the NFIP has faltered in the wake of Hurricane Katrina. Several legislators whose districts were hit hard by the storm, including Rep. Gene Taylor (D.-Miss.), have argued that the NFIP should also include mandatory wind coverage. Insurance industry associations have fought a wind inclusion, arguing it would force private insurers from the market. Also complicating the issue is the dreadful state of the NFIP finances.
The IIABA letter notes that NFIP extensions have been recently grouped with other contentious issues, such as extension of unemployment benefits and COBRA subsidies.
“While each of these programs may be important in their own right, the undeniable reality is that they have political problems that have hindered their consideration which in turn has hindered the consideration of the extensions of the NFIP,” the letter states. “It is extremely important to note, for example, that the extension of the NFIP is completely revenue neutral and does not generate a score by the Congressional Budget Office (CBO)—yet it was the scoring issues of the other programs in H.R. 4213 that delayed Congress’ consideration before the NFIP’s most recent June 1st expiration.”
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