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05/21/11 Categories: Article
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...
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...
Regarding privatization efforts, FEMA is explicitly authorized under the measure to “carry out initiatives to determine the capacity of private insurers, reinsurers, and financial markets to assume a portion the flood risk exposure in the United States.”
The Bill “clarifies” the power of the FEMA administrator to utilize private market reinsurance capacity to minimize the likelihood that the program would need to borrow additional funds from the Treasury. The legislation also directs FEMA to assess the capacity of the private reinsurance market by seeking proposals to assume a portion of the program’s risk, and to submit a report on such assessment within six months of enactment.
The Bill also gives FEMA the power to tear down and rebuild flood-damaged properties with the caveat that such action “must be cost-effective.”
Note to Appraisers: Doesn't this sound like a "Before and After" appraisal opportunity? As well as a "Cost to Cure" opportunity? It sure does to us!
The bill was first passed April 11 by the House Subcommittee on Insurance, Housing and Community Opportunity.