Leadership of the Senate Banking, Housing, and Urban Affairs Committee has filed the final report for the Flood Insurance Reform and Modernization Act of 2011, which the committee originally passed in September 2011. The filing is a necessary prelude for a floor vote on the bill, which would extend the National Flood Insurance Program for five years, phase out subsidized rates, and direct the Federal Emergency Management Agency to explore private alternatives, such as reinsurance, to manage catastrophic flood risks.
The following statement by R.J. Lehmann, deputy director of The Heartland Institute’s Center on Finance, Insurance, and Real Estate, may be used for attribution. For more comments, refer to the contact information below.
“For years, Congress has delayed taking serious action to reform the NFIP, a program with $18 billion in debt that long has been on the Government Accountability Office’s high-risk list. With the program’s statutory authorization set to expire December 16 at the end of the current continuing resolution, it appears likely to happen again, as Congress is almost certain to pass another short-term extension.
“American taxpayers and homeowners deserve better than that. The bill under consideration in the Senate, much like the one passed earlier this year in the House, does not go far enough in shrinking the government’s footprint in the flood insurance market. But to the extent that both bills curtail some of the flood program’s most egregious problems, such as premium subsidies to roughly a third of NFIP policyholders and severe claims from repetitive loss properties, the reforms proposed in either bill would represent a good first step toward bringing fiscal sanity to the program.”
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