A national insurance agents group is asking Congress to finally address a long-term solution to preserve the National Flood Insurance Program for the foreseeable future.
The National Association of Professional Insurance Agents (PIA) said it supports draft legislation to give the program, run by the Federal Emergency Management Agency (FEMA), a five-year reauthorization rather than the current practice lawmakers are taking, renewing the program for months at a time.
Brian Marino
On April 15, Congress approved another short-term extension of the NFIP through the end of May. That approval came 18 days after the program expired, making coverage retroactive to the expiration date.
PIA National President-elect Brian Marino said that over the last several years, Congress has granted “shorter and shorter reauthorizations for the vital program.
“These recurring short reauthorizations and frequent lapses play havoc with real estate markets and put insurance agents and their clients who need flood insurance at a distinct disadvantage,” he said in a statement. “We are encouraged that there is finally a bill filed that begins to address program reforms and provides for a longer reauthorization.”
Three bills are currently filed for Congress to consider: one extending the program for five years, another adding wind perils to NFIP flood insurance policies and HR 4213, the “tax extenders bill,” renewing the NFIP through the end of this year.
The latter bill has been tied up in bipartisan wrangling over tax credits contained in the legislation.
The PIA said it prefers the five-year extension, but opposes adding wind coverage. The agents’ group said wind perils are covered under homeowners’ policies and statewide wind pools, not the NFIP, and should remain that way.
“Having some policyholders’ flood and wind policies combined in the NFIP, some separated between the NFIP and state wind pools, and still others having only one coverage or the other is a recipe for marketplace chaos,” Marino said. “Uncertainty over which policy covers which losses would lead to an increase in coverage disputes and related litigation.”
The PIA also said it supports forgiving $20 billion in debt incurred by the NFIP to ensure the program can build reserves for future flooding events.
“Attributing the debts incurred by the flood insurance program to FEMA’s management of it ignores the fact that four extraordinary major hurricanes hit the United States in 2005 causing extensive flooding losses that exceeded reasonable reserving,” the PIA said.
Group urges Congress to stop ‘havoc’ of short-term NFIP extensions via IFAwebnews .
