National Flood Insurance Program Reform Advances
The House bill's author said its passage July 12 on a 406-22 vote "reflects our collaborative approach" in crafting the legislation, which would phase out taxpayer-subsidized rates.
A bill to reform and reauthorize the debt-burdened National Flood Insurance Program until fall 2016 is now before the U.S. Senate Banking, Housing and Urban Affairs Committee after being passed July 12 by the U.S. House of Representatives. Its author, Rep. Judy Biggert, R-Ill., said HR 1309 contains much-needed reforms.
It passed on a 406-22 vote.
The current authorization will expire Sept. 30, and Biggert said she hopes the bill will reach President Obama's desk by then. It would reduce the burden on taxpayers and open new avenues for private-sector participation in the flood insurance market, she said. "Homeowners and communities that rely on the NFIP are the clearest winners in [the July 12] vote, but with these reforms, the taxpayers also will finally get the protection they deserve," she said. "We worked with members of Congress and stakeholders from every corner of the country to craft this bill, and I'm pleased that its bipartisan passage reflects our collaborative approach."
FEMA administers NFIP, which currently has a debt of $17.75 billion, to complement the private insurance market and expand the availability of flood insurance for homes and businesses. She noted that recent Government Accountability Office reports labeled the program high-risk, and it has been criticized for under-pricing risk and promoting development in flood-prone areas more suitable for conservation.
"As the first significant reform to the program in nearly a decade, this bill will phase out taxpayer-subsidized rates and restore the integrity of the flood mapping system," Biggert said. "It also eliminates barriers to the development of a private flood insurance market and helps take taxpayers out of the risk business. The NFIP is too important to let lapse and too in debt to continue without reform. I urge my colleagues in the Senate to speed this legislation to the president's desk."
The bill confirms FEMA's authority to utilize private reinsurance in lieu of taxpayer exposure to mitigate risk and directs the agency to report on proposals from the private market for assuming risk within the program.