Senate Delay Leaves Flood Policyholders High And Dry

Real Estate Broker/Owner with Marie Bost~Broker~Edisto Real Estate

Currently the National Flood Insurance Program is only funded until March 28, 2010 (which is a Sunday).  Senate Delay Leaves Flood Policyholders High And Dry 


Insurance industry officials pressed Congress for longer-term action on reauthorization of the National Flood Insurance Program after a delay in the U.S. Senate allowed the plan to expire, creating the potential for chaos in the market.

An agreement by Sen. Jim Bunning R-Ky., to drop his objections allowed the Senate to move forward with H.R. 4691-a composite spending measure that in addition to reviving the NFIP until March 28, extended several other federal programs that had expired on Feb. 28.

Officials of the American Insurance Association said that in the wake of the temporary extension, the Senate has begun consideration of a broader package, which will extend the NFIP till Dec. 31, 2010.

Meanwhile, the Federal Emergency Management Agency-which administers the NFIP-posted Write-Your-Own Bulletin W-10015 on its Web site ( to help carriers deal with the rare two-day hiatus in the authorization for the flood program, and the fact that the re-authorization was not made retroactive.

At the same time, Harriette Kinberg, chief of the Industry and Public Relations Branch of the Federal Insurance and Mitigation Administration/Risk Insurance Division of FEMA, clarified that a "talking point" document issued by the agency in anticipation of a lapse in the program said the document incorrectly stated that flood insurance policies would expire and claims would not be paid during the lapse period.

In responding to the reauthorization, Blain Rethmeier, an AIA representative, said "this feels like living paycheck to paycheck... At some point, this short-term extension game needs to stop and more meaningful reform needs to be enacted."

Other industry officials were also critical.

"This episode illustrated what can happen if Congress continues to use NFIP reauthorization as a political football," said Mike Becker, director of federal affairs for the National Association of Professional Insurance Agents. "Real estate closings can get delayed when mortgage holders require flood insurance, putting the financial security of millions of Americans at risk. This can have a negative effect on the overall health of our economy."

He added that "we agree that the flood insurance program needs common-sense reforms, but the reform process must be conducted in a manner that does not destabilize markets."

Matt Brady, a representative for the National Association of Mutual Insurance Companies, noted that this was the second time in a row the NFIP was allowed to expire for reasons that have nothing to do with the program itself.

"With the next deadline just a few weeks away, we believe this experience should serve as a reminder to make extending the program on a long-term basis with common-sense reforms a priority for the government," Mr. Brady said.

"This vitally important program protects over five million families across the country," said David Sampson, president and chief executive officer of the Property Casualty Insurers Association of America. "The recent debate in Congress underscores the need to bring greater certainty and stability to the flood program in 2010 and advance a long-term extension that ensures the program's fiscal soundness."


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