WASHINGTON (May 13, 2008) – Legislation to extend and reform the National Flood Insurance Program will go a long way toward alleviating some of the concerns of residents in flood-prone areas, according to the National Association of Mutual Insurance Companies (NAMIC). NAMIC applauded today’s Senate passage of the proposal.
S. 2284, the Flood Insurance Reform and Modernization Act of 2008, reauthorizes the NFIP for five years beyond its Sept. 30 expiration and enacts significant reforms to the program. “These much-needed reforms will provide peace of mind to the millions of Americans who rely on the NFIP by ensuring it will have money available to pay flood claims when losses occur,” said Carl Parks, NAMIC’s senior vice president for government affairs.
The legislation requires the government to update the nation’s flood maps, phase-in actuarially sound rates for non-residential and non-primary residences, and increase penalties for financial institutions for non-compliance. It also forgives the NFIP’s debt, estimated at more than $18 billion.
“These reforms will bring this vital program into the 21st century,” Parks said. “It also puts the program on a path to a sound financial future.”
Parks also commended the Senate for rejecting attempts to add windstorm coverage to the program. “Including wind coverage in the NFIP would likely have serious long-term repercussions for the program, from which it might not be able to recover,” he said. “Increasing the NFIP’s loss exposure would drive the program deeper into debt, probably leading to the end of the NFIP.”
Both the Senate and House have now passed flood extension and reform legislation. The House-passed version includes a provision to force wind coverage into the NFIP.
“We will continue to work with members of Congress to ensure a final bill extends the NFIP with much-needed reforms, but without adding wind coverage to the program,” Parks said.
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Posted: Tuesday, May 13, 2008 12:00:00 AM. Modified: Wednesday, May 14, 2008 12:47:40 PM.
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