Seen at Insurance Journal:
The U.S. Senate passed a temporary extension of the National Flood Insurance Program (NFIP) and President Barack Obama signed the legislation into law just few hours before the program was set to expire yesterday.
The NFIP extension was passed as a Continuing Resolution (CR) by the Senate as part of the House-Senate Conference Report on H.R. 2918, the "Legislative Branch Appropriations Act 2010." The extension will expire until Oct. 31, 2009.
"It is alarming that the NFIP, which was set to expire at midnight yesterday, came within a few hours of leaving millions of homeowners and small businesses unprotected," says Robert Rusbuldt, Big "I" president and CEO. "Had the program been allowed to expire, it would have resulted in no more new or renewed flood insurance policies and millions of consumers would have been left without flood insurance coverage."
This has been the status quo of the National Flood Insurance Program. Challenged with addressing concerns about the actuarial adequacy of the NFIP rates, questions about whether the program as designed incents people to live in harm’s way or disincents communities from taking damage-mitigation measures, coverage terms which haven’t kept up with the evolution of personal and small business property insurance over the past few decades, and the mess that arose in the wake of Katrina (extra claims-adjustment bureaucracy for insureds, allegations of inappropriate cost-shifting from private insurance to the NFIP)…Congress for the past few years has opted to just periodically “temporarily” reauthorize the program.
Punt…wait a few months…punt again…wait a few more months…punt.
At least flood insurance will be available for homeowners and small businesses through October. Then, considering how distracted Congress is on other matters, the question will be how long the next reauthorization will last.
