Insurers optimistic on flood cover billPosted On: Jul. 17, 2016 12:00 AM CST
Advocates for creating a role for private insurers in the U.S. flood insurance market remain hopeful that Congress will approve legislation designed to do just that before the end of the year.
They point out that the House of Representatives voted 419-to-0 in favor of the Flood Insurance Market Parity and Modernization Act more than two months ago. The bill would allow private flood policies to fulfill the National Flood Insurance Program purchase requirement when applying for a loan. Though a similar measure in the Senate hasn't been taken up by the Banking, Housing and Urban Affairs Committee, supporters hope that lawmakers will act on the measure, even if they wait for the post-election lame duck session.
The NFIP, which is more than $20 billion in debt, will expire Sept. 30, 2017, unless it is reauthorized. The program has been allowed to lapse in the past as lawmakers disagreed over whether to expand the program to include windstorm coverage as well as flood, only to be extended as is.
Tom Glassic, vice president-policy and government affairs in the Washington office of the Property Casualty Insurers Association of America, said it's rare that an issue that doesn't have to be resolved for 14 months — reauthorization of the NFIP — is being discussed already. “These are positive things,” he said. “There's no conversation of 'if' from anybody.”
With reauthorization looming, the Senate Small Business Committee held a hearing on the affordability of flood insurance last month. Though NFIP reform proponents welcomed the hearing, they don't hold out hope that it will lead to action by itself.
“Will the hearing spur Senate action?” asked Tom Lantos, vice president-federal affairs for the Washington-based American Insurance Association. “That would be a stretch. But that does not mean the Senate still can't act.”
He said that the Flood Insurance Market Parity and Modernization Act has “clearly broad bipartisan support to take this step. We continue to urge the Senate to take this up. It's been our position that this is a technical fix that would help the marketplace.”
“I have been saying since January if there's any piece of flood insurance legislation that's going to be enacted this year, it's the Flood Insurance Market Parity and Modernization Act,” said PCI's Mr. Glassic. He, too, noted that he bill has bipartisan support, little opposition and “it's the only thing in flood conversation that doesn't go into the 2017 reauthorization bucket.”
AIA's Mr. Santos noted, however, that “there are a dwindling number of legislative days left; we're going to continue to urge the Senate to pass this bill. Every time this issue comes up, we're going to press whoever's listening to pass this bill.”
“We're running out of time” to get the Flood Insurance Market Parity and Modernization Act passed this year, said John Hair, federal affairs director at the National Association of Mutual Insurance Companies' Washington office.
He said the bill could be taken up if “it's attached to must-pass legislation,” possibly even in a lame duck session after the November elections.
He added that there's some possibility the Senate could take it up in September “if there's a push” over the summer recess.