Mississippi, Louisiana Senators Try to Add Wind Coverage to Flood Program

A new development in the efforts to extend and reform the National Flood Insurance Program may intensify the debate on the issue in the Senate. Last week, four senators sent a letter to Chairman Christopher Dodd D-Conn., of the Senate Banking Committee, threatening to prevent the bill from getting to the Senate floor unless wind coverage is added to the program.

Legislation passed by the committee would extend the program for five years and would add much-needed reforms to the program. But unlike legislation passed by the House, the Senate legislation does not add wind coverage to the NFIP.

We strongly support S. 2284 that would reform the NFIP by mandating that flood maps be updated, phasing-in of actuarial rates for non-residential and non-primary residences, increasing penalties for financial institutions for non-compliance, and increasing the maximum coverage limits. The legislation also includes a provision that would forgive the more than $18 billion NFIP debt.

We have and will continue to vehemently oppose the inclusion of wind in the NFIP. Adding this additional high-risk peril would double the NFIP’s financial exposure, thereby threatening the solvency of the program.

The Bush administration is also opposed to the inclusion of wind in the NFIP and has indicated it will veto any flood reform that includes wind as part of the NFIP.

The four senators who wrote the letter represent the key coastal states of Mississippi and Louisiana. In their letter to Sen. Dodd, they threaten to use congressional maneuvering unless their concerns are addressed in a manager’s amendment to be taken up on the floor. In addition to adding wind to the NFIP, the senators want a mandated rate increase to be phased-in more slowly, to more closely resemble similar language in the House bill.

We strongly support the reforms in the current Senate bill and fear reopening it could put this bipartisan legislation in jeopardy. Expanding the NFIP’s coverages and liabilities would weaken the program and make it less efficient, contrary to the goal of the proposed reforms. Despite the controversy created by the letter, there are indications from Senate leaders that the legislation may go the floor of the chamber within the next few weeks.

We will continue to work with Chairman Dodd to see the needed reforms are included in the legislation and that wind coverage is not part of the program. Watch for Action Alerts and updates on this important issue.

Posted: Tuesday, April 29, 2008 12:00:00 AM. Modified: Tuesday, April 29, 2008 2:55:52 PM.

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