Flood Insurance Reform
July 18, 2011 by USA Post
Flood Insurance Reform, Insurance groups in the industry say they expect the U.S. Senate follows the lead of the House of Representatives and approved legislation to expand the National Flood Insurance at September 30, 2016.
The program has expanded gradually and ceases to have effect on several occasions in recent years, the House and Senate could not agree on what the NFIP should and should not be covered. The result was repeated market disruptions since the program could not issue new policies.
However, the House approved bipartisan Flood Insurance Reform Act of 2011 in a vote 406 to 22 the week after defeating an amendment that would have killed the program next year. Groups and business insurance, including risk & Insurance Management Society Inc., had sent a letter to House leaders earlier this week opposing the amendment.
Among other things, the reform project, with the support of the Obama administration would extend the program for five years beyond its current sunset September 30. Studies are also needed the ability to give the private insurance industry a greater role in flood insurance, and reducing subsidies for the program.
New York, hailed the vote TIRES.
“We are very pleased with the vote in the House and anticipate eventual Senate passage because it keeps the risk of a major financing tool for our members,” said John Phelps, RIMS link the board of the Foreign Affairs Committee.
“While we believe that certain improvements in the program can and should be done, removing the program was not in the best interests of the insured business that depend on flood coverage through the program,” said Phelps, who is also director business risk solutions for Blue Cross and Blue Shield of Florida Inc. in Jacksonville.
Ron Hayes, risk manager for the Calcasieu Parish School System in Lake Charles, La., said he was “absolutely delighted” by the proposal to extend for five years.
“Last year, fearing the loss of the program that could affect the properties in danger of lack of protection” because of repeated failures in the program, said Hayes, former president of the Alexandria, Virginia, public risk management association. When it seemed NFIP could leave the market or “die for lack of funds, we really had no choice-there was no place to get coverage,” he said.
Insurers support the NFIP recent legislation and the Senate to follow suit quickly.
Most of the obstacles that hindered meaningful reform in the past are gone, said Jimi Grande, senior vice president of the Washington office of the National Association. Mutual Insurance Cos.
“We have a better chance we have had a significant reform in the Senate,” he said. Unlike a measure introduced in the previous Congress, this bill does not contain a provision requiring the program to include wind and flood cover, he said. Mr. Large said the main advocate of the expansion, the former Congressman Gene Taylor, D-Miss., Was defeated in his reelection bid.
“We had one of the largest seasonal flooding we have had and natural disasters in general, have been devastating this year,” said Grande. However, “the Senate still has a long record of action of this program.”
“The House has done its part to solve this problem,” said Grande. “The ball is now in the Senate and the clock is ticking.”
In a statement, Ben McKay, senior vice president of the victim Property Insurance Association. Washington, USA office, said the NFIP repeated lapses caused havoc in the market.
“In 2010 alone, four times won the NFIP and flood coverage can not be purchased or renewed a total of 53 days,” said McKay. “Flaws in the NFIP coverage have created uncertainty in the housing market and homes and businesses left even more vulnerable to devastating floods, exposing taxpayers to costly relief efforts.”
“The greatest significance of the vote is not about kicking the can down the road, as they have in the past. It really is a new authorization for five years, and moves slowly toward the program and sound actuarial basis,” said Joel Kopperud, director of government affairs for the Council of Insurance Agents & Brokers in Washington.
“The House bill is an extension of five years and contains a series of reforms that move the program into a stronger position financially,” said Tom Santos, vice president of federal affairs for the Insurance Association of America. In Washington. “It got 406 votes, making it a good product bipartisan help ensure the program remains for the 5.6 million policies needed to cover the floods.”
“The Senate Banking Committee has held two hearings and are working to produce a bipartisan,” said Santos. “I see no barricade on the committee, but I think everything is held in the Senate in negotiating the debt ceiling, so they have some problems of time and programming.”
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