Bid to add windstorm cover to NFIP remains up in the airPosted On: Jul. 25, 2010 12:00 AM CST
WASHINGTON—Legislation that would require the National Flood Insurance Program to offer windstorm as well as flood coverage is in limbo.
The Multiple Peril Insurance Act, sponsored by Rep. Gene Taylor, D-Miss., appeared likely to come to a vote last week after the House agreed to a rule for its consideration. But once the rule was approved, House leaders took no further action on the bill.
The act, which is opposed by much of the property/casualty insurance industry, would expand the NFIP by adding windstorm coverage to the program, which currently provides only flood coverage. Insurers hold that the private market for windstorm insurance can meet demand for the coverage.
A day before the measure at least temporarily stalled, the White House issued a statement of administration policy opposing the measure. The statement said adding windstorm coverage to the NFIP would “unnecessarily duplicate” existing insurance products and “could "crowd out' such products where they are offered.” The statement added that “at a time when the NFIP is already facing serious challenges, the administration cannot support such an expansion.”
Insurers welcomed the delay, but said they can't declare the bill dead yet.
Ben McKay, senior vp in the Washington office of the Property Casualty Insurers Assn. of America, said: “We're not taking anything for granted. We have to act like it's a certainty it will be coming up, because Rep. Taylor is not going to let up trying to garner support, so we can't let up our opposition.”
“Our interpretation is that they counted the votes and concluded there was a likelihood it would be defeated and, therefore, the Democratic leadership pulled it to reassess what their options were,” said Frank Nutter, president of the Reinsurance Assn. of America.
“Obviously, some significant concerns were raised, leading to it getting pulled,” said a spokesman for the National Assn. of Mutual Insurance Cos. in Washington. “I can only assume that supporters of the bill are going to keep pushing to try to get where they want to be.”
Previous disagreements between the House and Senate over whether the NFIP should be expanded to include windstorm cover have led to an impasse during which the program has lapsed several times before being reauthorized on a short-term basis. The most recent extension will expire Sept. 30.