Legislation Pending as Flood Insurance Plan Nears Expiration

The National Flood Insurance Plan is set to expire at the end of September, but a simple bill to extend that expiration date awaits a Senate vote.

The Property Casualty Insurers Association of America is pressing Senate lawmakers to make that vote. "We cannot afford to compound the economic challenges our nation already faces by allowing the NFIP to lapse," said David A. Sampson, president and chief executive officer of PCI, in a statement. "This legislation, if enacted, will ensure that homeowners continue to be protected."

The House already had passed a two-page bill introduced by Rep. Maxine Waters, D-Calif., that provides a short-term extension, pushing the date to March 31 (BestWire, July 29, 2009). But the Senate hasn't yet considered the legislation.

Insurance industry groups such as PCI support a more long-term approach to re-structuring the plan, but because the expiration is so near, they have argued in favor of a plain extension -- for now. If Waters' H.R. 3139 passes, the industry has six more months to work with lawmakers on a more permanent solution.

Federal Emergency Management Agency statistics show that the flood insurance program had 5.7 million policies in place in 2007 (BestWire, July 9, 2009). Separate bills that each would have extended the program for five years passed the House in October 2007 and the Senate in May 2008. But progress stalled on resolving differences between the two bills, including provisions of the House bill empowering the NFIP to begin offering windstorm coverage through optional personal and commercial multiperil policies (BestWire, March 11, 2009).