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Flood insurance program extended for 6 months

Proponents of long-term solution have renewed hopes

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Flood insurance program extended for 6 months

WASHINGTON—Supporters of a long-term extension of the National Flood Insurance Program say they hope the recent approval of a six-month extension of the program will bolster their cause.

The extension came in an appropriations bill that President Barack Obama signed into law Dec. 23, 2011, only hours before the NFIP was set to expire. The provision dealing with the NFIP extended the program through May 31.

Advocates of the program, which enjoys support across the insurance industry, would like to see the NFIP reauthorized for five years, as a House measure passed last year would have done. However, they also welcomed the six-month extension as an opportunity to achieve longer-range goals.

A series of disputes between the House and Senate that began several years ago over whether the program should be required to offer windstorm as well as flood coverage resulted in numerous short-term extensions as well as several lapses of the program, which led to uncertainty in the real estate market. The expansion issue has been shelved, with neither the House nor Senate considering measures that would add windstorm coverage to the program.

“I think the extension is significant because it gives some breathing room,” said Tom Santos, vp of the American Insurance Assn. in Washington. “In the past, with short-term extensions, the one-month extensions, you're always trying to make sure you're getting that one month. With five months, we can focus on getting the long-term bill done, and that's what we're going to do.”

“We don't want to continue to kick the can down the road like we have in the past,” said Joel Kopperud, director of government relations at the Washington-based Council of Insurance Agents & Brokers. He said markets and council members need certainty that the program will exist.

“It's good news that it didn't lapse,” said Ben McKay, senior vp in the Washington office of the Property Casualty Insurers Assn. of America. “Avoiding that disruption is always our prime concern. However, it is only a short reprieve.”

“I honestly think this is an opportunity because the five-year reauthorization bill has passed the House and it's passed the Senate Banking Committee,” said the council's Mr. Kopperud. “The window of opportunity now is that we've got until May to get it through the Senate. I'm confident it will have the votes for final passage. We need leadership to bring it to the floor and have clear strategy for getting it through, but I'm confident in the next five months we can get that.”

Mr. Santos said the next step of the process is to try to get the Senate leadership to schedule floor time for consideration of the Senate Banking Committee's measure. He noted that the House measure received 406 votes, and the Senate Banking Committee bill passed on a voice vote.

Given strong bipartisan support for the extension, “there's a good opportunity to get a bill here,” said Mr. Santos.

Jim Grande, senior vp in the National Assn. of Mutual Insurance Cos.' Washington office, said while there are some differences between the House and Senate measures, they involve technical issues, and he is confident such differences can be bridged.

“There aren't major substantive differences,” he said. “They are really closely aligned.”

The measures also address such issues as deductibles and mapping standards.

PCI's Mr. McKay noted that “it would be unenlightened to say that the fact that this is an election year would not have an impact on any legislation.” But he said he hopes the reauthorization of the program does not get caught up in larger issues such as tax reform.

NAMIC's Mr. Grande said the temporary extension expires May 31, on the eve of the beginning of the Atlantic hurricane season. The timing might provide a “little extra incentive” to extend the program, he said.

“I am always hopeful that this is the last of a long series of short extensions,” he said. “Maybe I'm the last guy who has faith that this Congress can pull together to pass something they all agree on.”