NFIP Overhaul Draft Legislation to be Unveiled Next Week
A GOP lawmaker plans to unveil draft legislation next week that could officially overhaul the National Flood Insurance Program (NFIP). The announcement, which came from the Republican chairman of a congressional insurance oversight panel on Thursday, said that March 11 will begin what could be a lengthy debate on the troubled government program.
Legislation to Address Coverages, Taxes and Debt
House Representative Judy Biggert (R-Ill.) told Reuters on Friday that she will present a draft next week at a hearing of the House insurance subcommittee she chairs that will address tax issues and wind damage coverage, an issue that has brought about much contention in previous meetings.
She says that while the deep debt of the NFIP is a huge issue, her draft does not yet have a firm strategy for addressing it and is leaving this and other issues up for discussion in the panel hearing.
At the time of the final extension of the NFIP last year, lawmakers were given until Sept. 30, 2011 to take a closer look at the program. Getting their start in March, lawmakers hope to come to a resolution by the time the program is set to expire again.
The NFIP Has Been Troubled for Years
While issues surrounding the NFIP have been low-key for the past few months, from 2008 to 2010 the program was regularly criticized for its series of short-term extensions and even four expirations, which left millions of homeowners without flood insurance around the country.
At the time, lawmakers hoped the short-term extensions would give them time to create long-term changes to the NFIP, which backs flood insurance policies that are issued to the public by private home insurance companies.
But each time the program was extended with no real resolution, insurers and homeowners became increasingly impatient with the lack of organization. As a result, some insurers threatened to leave the program while State Farm officially dropped its customers.
After numerous reinstatements of the program, lawmakers eventually came up with a bill known as the Flood Insurance Reform Priorities Act of 2010, which not only pushed to extend the NFIP to 2015, but also work out some kinks in the program by increasing coverage limits, eliminating premium subsidies and limiting additional living coverage.
While some agreed the bill was a good idea, to date, it has never been signed into law. But with time to come up with ideas to save the program, lawmakers still have a chance to finally create a solid foundation the NFIP.