The U.S. Senate took significant steps this week toward reforming the National Flood Insurance Program, while also seeking to avoid a costly lapse in the program’s authorization. On Thursday, May 24, the Senate passed a 60-day extension that includes the permanent phase-in of risk-based rates on second homes and vacation homes. Preceding this extension was a public commitment by Majority Leader Harry Reid, D-Nev., to hold a vote in June on the five-year reauthorization and reform bill – S. 1940, the Flood Insurance Reform and Modernization Act.
Both Senate developments mark a breakthrough in the effort to reform the program while removing the uncertainty caused by short-term extensions. These rate reforms alone mark a victory for NAMIC and all those seeking fiscal sustainability for the NFIP. Even more encouraging, comprehensive reform is closer to reality than it has been since before the historic 2005 storm season.
The role of NAMIC members achieving progress on the bill cannot be understated. NFIP reform legislation has been ignored by the Senate for years, and a recently as a few months ago lawmakers claimed that there was not enough time on the calendar for work on NFIP reform. Through our grassroots action and Congressional Contact Program, NAMIC members sent a clear message that Congress could not simply kick the can further down the road again.
NAMIC was also joined by twenty-one trade groups and ten companies in the “Flood the Hill” campaign during the month of May. “Flood the Hill” included insurers, realtors, home builders, mortgage lenders, taxpayer groups and environment advocates using Congressional meetings, grassroots, earned media, social media (#floodthehill on Twitter), and paid advertisements. The campaign offered a unified voice to the Senate urging them to set politics aside and act on NFIP reform now.
Sen. Tom Coburn, R-Okla., in particular took up this fight and refused to give consent to another non-binding extension by the Senate with no reforms to the program. Coburn forced the inclusion of the rate reform in the 60-day extension. Under the rate reforms adopted by the Senate, the Congressional Budget Office has estimated that the NFIP will bring in an additional $2.4 billion in new flood insurance premiums over the next five years. This accounts for just under half of the approximately $4.9 billion in new premiums to the program encompassed by the larger bill in consideration.
Sen. David Vitter, R-La., was also effective in demanding a Senate vote by attempting to attach the flood bill as an amendment to another unrelated bill on the floor this week. The bipartisan support for this effort rallied by “Flood the Hill” made this threat credible and helped influence Majority Leader Reid’s agreement to hold this important vote after the Memorial Day recess.
NAMIC cautions that the short-term extension is not yet guaranteed, as the House of Representatives needs to agree to the Senate language and pass it before May 31, 2012. Since the Senate is in recess next week and will not be in town for further negotiations, the House will have to “take it or leave it”. Should the House reject the Senate proposal, NFIP authorization will lapse, resulting in a costly interruption to the housing, insurance and financial markets. Despite stated opposition by House leaders to the Senate measure, they are expected to acquiesce one more time and vote to avoid the lapse.
Whether or not a short term extension is adopted next week, leaders in both chambers believe that they can swiftly negotiate the differences between the two broader reform bills after Senate passage of S. 1940. First and foremost, NAMIC will continue working to avoid a lapse and will urge the House to accept the Senate extension.
NAMIC and its member companies have been fierce advocates for NFIP reform for years. While it has not crossed the finish line, NFIP reform is closer than it ever has been to becoming law.
Contact: Jimi Grande
Senior Vice President, Federal and Political Affairs
Posted: Friday, May 25, 2012 10:21:31 AM. Modified: Friday, May 25, 2012 12:01:08 PM.
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