Senate, House have different views on future of National Flood Insurance Program


The U.S. Senate unanimously extended the National Flood Insurance Program (NFIP) through May 31, 2012, and the House of Representatives passed a bill reforming and extending it for five years the NFIP.

The temporary extension bill (SB 1958), introduced by Sen. David Vitter (R-La.), passed the Senate Dec. 7 and now awaits consideration and a vote by the U.S. House of Representatives to avoid the NFIP’s scheduled expiration Dec. 16.

The House and Senate are working on legislation that would extend the NFIP for five years and make reforms. The House passed July 21 their version of the legislation, the Flood Insurance Reform Act of 2011 (HR 1309).


The NFIP covers about 5.5 million U.S. property owners from flood risk.

The Senate Committee on Banking passed their version, the Flood Insurance Reform and Modernization Act, but the bill must still be considered by the full Senate. Once the Senate passes its legislation, the House and the Senate must agree on a final bill.

We’re getting close to the goal line and we need to push forward and actually enact real, substantial reform,” Steve Ellis, vice president ofTaxpayers for Common Sense, said in a teleconference Dec. 7.

The NFIP is about $18 billion in debt and costs taxpayers about $2 billion a year in premiums, according to Ellis.

The program [NFIP] failed at it’s responsibility to taxpayers, so we to enact a reform in the House and Senate bill before the next hurricane season,” Ellis said. “This bill [Flood Insurance Reform Act] is a bipartisan solution that’s been hammered out and it’s something that could be a win for this Congress.”

Some of the NFIP reforms include increasing the premiums for flood insurance over a period of three to five years, between 10-20% per year; a technical mapping advisory council made up of representatives from federal agencies that will create new criteria for mapping; increased penalties on federally regulated mortgage lenders and GFEs (good faith estimate), that are required for properties that are in a flood plain, to require flood insurance; and increased penalties and stricter enforcement.

There are also some buy-out options for repetitive loss properties who wish to leave flood-prone areas.

Wildlife advocates say the current NFIP enables destruction of natural protection against flooding.

NFIP has basically become an enabler for destroying some of the absolute best wetland protection money can buy,” said Joshua Saks, senior legislative representative at the National Wildlife Federation, in the teleconference. “The NFIP acts as a subsidy, which allows market forces to encourage development of these areas [wet lands, flood plains, wildlife] instead of discourage it. When the NFIP was created, it was intended to move people away from flood plains. As long as we extend the program, we just put a bandaid on it, and we don’t address the issue, we don’t preserve this important wildlife habitat which is also an important flood control space. So reforming the bill is a priority of the National Wildlife Federation and we hope to see it on the floor as soon as possible.”

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