As many expected, last night the U.S. Senate voted 86-13 in favor of a plan that would delay modifications to the National Flood Insurance Program.
“We definitely want the reforms delayed,” said Angelyn Treutel, president of SouthGroup Insurance-Gulf Coast. “We want it delayed because it’s not affordable to our customers. They can’t afford the ridiculously high rates that are being proposed as actuarially sound. We support reform, but it has to be done in such a way that doesn’t cause further devastation. We can’t trade one disaster for another.”
Treutel said as a result of the proposed changes, which would raise insurance premiums, the real estate market in coastal communities, which was recovering, has been weakened, with transactions falling through, businesses closing and families unable to pay mortgages.
However, delaying reforms entails de facto subsidization, which the Obama administration opposes.
“By slowing down the Biggert-Waters reforms, Congress will ensure that taxpayers will continue to subsidize property owners at risk of flooding. Major rethinking and restructuring of the program is needed if it is to survive,” said Lawrence Mirel, partner at law firm Nelson Levine de Luca & Hamilton and former Commissioner of Insurance, Securities, and Banking. “It is certainly understandable that property owners become alarmed at the prospect of sharp increases in the cost of flood insurance, and that their elected representatives respond to their concerns. But someone has to pay for the risk of flood, and if not those who own the property at risk, it will be the taxpayers.”
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access