Flood Insurance Reform Act


Editorial: Senate Debates Additional Flood Coverage

Having just lived through Hurricane Irene, and the significant tidal flood damage done to our summer cottage in Long Island Sound from the 7 foot storm surge added to our normal high tide of 8 feet, this article struck our attention.

The GOOD NEWS: My own experience dealing with FEMA personnel in a difficult situation has been surprising, given their less than stellar reputation.I found them to be professional, courteous and genuinely helpful. In our area of the Connecticut shoreline there was a great deal of damage, including the wash-out of many of our main access roads. Nonetheless, the FEMA adjusters showed up and did their job of assessing the damage in a timely manner.

At issue in Congress now are new requirements for flood insurance coverage in residential and business areas near levees, dams and other flood-control structures.

According to a report October 19th in Property Casualty 360, two Gulf-Coast senators are seeking to remove a Senate flood-insurance legislation provision requiring flood coverage in areas already protected by levees, dams or other flood-control structures. Sen. Thad Cochran, R-Miss., and Mark Pryor, D-Ark., announced late Monday that they are seeking to have Sec. 107 of the National Flood Insurance Program Reauthorization Bill deleted from the proposal. The provision was included in a bill that was reported out of the Senate Banking Committee Sept. 8.

Cochran and Pryor are raising the issue despite the fact that the Senate is working under the pressure to pass another temporary extension of the National Floord Insurance Program (NFIP), now slated to sunset Nov. 18.

The Senate must pass a bill, then reconcile its version with a somewhat different House bill, H.R. 1309, the Flood Insurance Reform Act of 2011, before that date, or NFIP will lapse.

Seems Congress is once again playing brinksmanship with America's flood insurance program. After our recent experience, that doesn't seem wise to us.

Summer Cottage "Pre-Irene":

Post-Irene Damage from Tidal Flooding:

Matt Gannon, assistant vice president of federal affairs for the National Association of Mutual Insurance Companies, voices sympathy for the concerns of Cochran and Pryor, but adds that the Senate bill’s Technical Mapping Advisory Council was established to address this very type of issue. But Cochran and Pryor say they are asking their colleagues to join them in signing a bipartisan letter to the banking panel asking for reconsideration of Sec. 107. This provision would have expanded required insurance coverage to “areas of residual risk” that are located behind levees, near dams or other flood-control structures.

“The NFIP must be reformed, and I believe the Senate Banking Committee has done yeoman’s work on crafting bipartisan reform legislation,” Cochran says. But he notes that Sec. 107 creates new flood insurance coverage mandates on families and businesses that are already protected by strong levees and dams, and believe that "the blanket approach taken in the current bill should be changed in order to ensure fair treatment for those protected properties."


House Committee Approves Flood Program Extension; Bill Goes To House Floor, from PropertyCasualty360.com

The House Financial Services Committee reported to the House floor legislation reauthorizing the National Flood Insurance Program for five years. The vote was unanimous. The bill is H.R. 1309, the Flood Insurance Reform Act of 2011.

A key component of the bill is a provision that, for the first time since the program was launched in the 1950s, opens the door for the private market to play a strong role in insuring against flood, primarily through reinsurance...

Industry and House leadership want the bill out the door promptly in order to give the Senate as much time as possible to deal with the issue before the current extension of the program runs out Sept. 30th. The program has been extended 10 times on a short-term basis since the original reauthorization ran out Sept. 30, 2008. The program lapsed for a total of 53 days last year because Congress was unable to pass short-term extensions on time.

Following a lengthy debate, the full committee decided to add business interruption insurance to the program. A subcommittee had passed a provision adding the coverage earlier, and the full committee rejected an amendment sponsored by Rep. Jeb Hensarling, R-Texas, that would have removed that provision... Read More...