The National Flood Insurance program, which has limped along on a series of temporary extensions, may be due for a more substantial resolution.
The House Financial Services Committee has passed H.R. 5114, the Flood Insurance Reform Priorities Act of 2010, which aims to extend funding for the NFIP by five years.
“The recent lapses in the NFIP due to the use of short-term extensions has caused disruptions to homeowners, businesses and hindered real estate closings nationwide,” Blain Rethmeier, spokesman for the American Insurance Association (AIA), said in a statement. “We applaud the Committee for moving forward on a long-term NFIP reauthorization, which will bring stability to the market.”
Sponsored by Reps. Maxine Waters (D-Calif.) and Shelley Moore Capito (R-W.V.), the act would also increasing the maximum coverage limits for flood insurance policies among other reforms.
John Prible, VP of federal government affairs for the Independent Insurance Agents & Brokers of America, praised the inclusion of a provision that enables consumers the option to purchase business interruption and additional living expenses coverages on an actuarial basis.
“The NFIP has been a successful program for consumers for more than 40 years, but it is time to modernize it for today’s world by allowing consumers the option to purchase business interruption and additional living expenses coverage,” Prible said in a statement.
In a separate vote, the Committee also approved H.R. 2555, the Homeowners’ Defense Act. Rethmeier said the AIA was not pleased with the legislation, which seeks to create a national catastrophe insurance pool. “This bill does not require states to charge risk-based premiums, maintain adequate reserves, or establish a solid, private-market reinsurance program,” he said. “Artificially suppressing insurance rates generates moral hazard by encouraging people to build and locate in more catastrophe-prone areas.”
insurance, flood insurance, legislation, reform, Independent Insurance Agents & Brokers of America, American Insurance Association
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