NFIP reauthorisation vote gets thumbs up from insurance groups

16-11-2017

The US House of Representatives has voted to reauthorise the National Flood Insurance Program (NFIP) with some amendments, a move that has been greeted positively by insurance industry representatives that include the Property Casualty Insurers Association of America (PCI).

However, these groups also pointed out that some elements of the bill, named the 21st Century Flood Reform Act, still require tweaking. The bill must still be voted on by the Senate before going to the President for final approval.

“Nearly five million American consumers rely on the NFIP to protect their homes, properties, and businesses,” said Nat Wienecke, senior vice president, federal government relations at the PCI. “A long-term reauthorization is needed to provide consumers and markets with reliability and stability when it comes to flood insurance coverage.

“The bill that passed the House includes a number of important reforms that streamline and reduce unnecessary burdens in the programme. The bill also includes PCI supported language to reduce costs and increase options for consumers, such as the bipartisan Ross-Castor language. “Too few homeowners and businesses have flood protection and this bill would expand consumers’ flood options. The bill also makes meaningful structural reforms that improve the solvency of the programme,” said Wienecke.

But he also highlighted some areas of concern in the bill. “PCI, however, is concerned that the bill would make cuts to the Write Your Own companies that partner with FEMA to administer the NFIP,” he said. The WYO companies are servicing 120,000 flood claims resulting from Hurricanes Harvey, Irma, Maria, and Nate. Since 2004, the number of private Write Your Own insurers who voluntarily service the program has declined from 107 to fewer than 70, over a 35 percent drop.

“PCI will continue to work with Congress toward the goal of passing a long-term reauthorization of the NFIP, as the program is still set to expire on December 8,” concluded Wienecke.

The bill was also welcomed by SmarterSafer.org, a lobby group for taxpayers, which noted that despite the programme becoming laden with debt, reforms should ensure the programme is financially sustainable for the future.

“SmarterSafer is particularly pleased that the House adopted many of the measures outlined in our NFIP proposal, such as investing in mapping and mitigation, addressing affordability and providing consumer choice in the flood insurance marketplace. As the bill moves to the Senate, our coalition will work closely to ensure that the final reauthorization package includes additional provisions that require property level data in mapping, nature-based community mitigation measures, continued movement toward risk-based rates and ways to convert affordability assistance into mitigation where cost-effective.

“Putting these reforms into place will help Americans reduce damage from future storms while ensuring that the federal program remains viable for years to come.”

PCI, NFIP, US, Floods, Natural Catastrophes, North America

Bermuda Re