It took Congress several years to agree to a long-term extension and reform of the National Flood Insurance Program. As a result, the program was reauthorized in fits and starts, and even lapsed several times as lawmakers couldn't agree on the breadth of the program.

When legislators finally agreed on the shape of reforms necessary to keep the debt-ridden program viable and reauthorized the NFIP this year, it looked like a contentious issue was off the legislative table for at least the short term.

Superstorm Sandy may have changed that, though.

During a meeting this month of the Federal Advisory Committee on Insurance, Edward Connor, deputy associate administrator-federal insurance and mitigation administration at the Federal Emergency Management Agency, said the NFIP doe not have the borrowing capacity to meet Sandy-related losses. In fact, the NFIP can borrow less than $3 billion to cover losses that could rise to $12 billion, he said.

The program already is nearly $18 billion in debt for losses stemming from Hurricane Katrina, with its borrowing cap set at $20.7 billion. Mr. Connor said he expects the Department of Homeland Security, of which FEMA is a part, to ask Congress to authorize an increase in FEMA's borrowing capacity.

That might not go over well with a Congress concerned about spending, taxes and the looming “fiscal cliff.” But the NFIP's troubles could be a catalyst to revive consideration of a greater private sector role in covering the peril of flooding.

This isn't a new idea. Nearly two years ago during a public hearing on the NFIP, the Reinsurance Association of America and the Association of Bermuda Insurers & Reinsurers argued that the program should be partially or entirely privatized as a means to protect taxpayers.

This is an idea, that should resonate now. After all, commercial flood insurance is available in this country, albeit often layered atop NFIP policies. And the reinsurer organizations said two years ago that the private reinsurance market and capital markets “have the capacity and interest in underwriting flood insurance risk.”

Unfortunately, the challenges facing even a partial privatization of the flood insurance market are less economic than political. A private market would demand premiums set at true risk rates based on sound underwriting. That makes sense in the insurance world, but not necessarily in Washington's world, even when curbing government spending is a must. Too many people would have to pay higher rates for coverage, and that would result in a torrent of complaints washing through lawmakers' offices.

Still, the current situation is untenable. The time to start thinking seriously about some form of privatization of flood coverage was quite a while ago. As the NFIP's debts mount, a debate over how the private sector can reduce some of the federal financial burden stemming from the program is timely and overdue.