Flood Insurance Reform
Updated February, 2010
Given the devastating consequences of hurricane seasons in recent years, the issue of flood insurance has garnered much attention from lawmakers in Congress.
During the 110th Congress Rep. Maxine Waters, chairwoman of the House Financial Services Subcommittee on Housing and Community Outreach, introduced the Flood Insurance Reform and Modernization Act (H.R. 3121). This measure would have reauthorized the National Flood Insurance Program (NFIP) for five years, increased the NFIP borrowing authority, and updated the maximum insurance limits and increased the fines for lenders who do not enforce the mandatory flood insurance policy purchases requirements for those living in a flood-plain and holding a federally-backed mortgage. The bill also included language addressing the issue of multi-peril insurance. H.R. 3121 passed the House in September 2007.
In 2008, the Senate took up H.R. 3121 and amended the measure to include a significantly different version of comprehensive flood insurance reform. The Senate passed bill would have forgiven NFIP’s debt of $17.5 billion, and did not include the addition of wind insurance as prescribed in the House passed bill. At the conclusion of the 110th Congress, House and Senate conferees attempted, unsuccessfully, to resolve the key differences in the House and Senate flood insurance reform bills.
Despite the lack of consensus on flood insurance reform legislation, the 111th Congress has acted to ensure that basic NFIP authorities remain in force by passing several short term extensions of the NFIP. The most recent extension is set to expire in February, and NAFCU expects that another NFIP extension will be included in the jobs measure currently being crafted in the Senate.
In addition, several flood insurance-related bills are currently before the 111th Congress. Rep. Gene Taylor has introduced legislation (H.R. 1264) to add wind coverage to the NFIP. Also, Rep. Frank Pallone has introduced H.R. 777 to suspend flood map changes until the administrator of the Federal Emergency Management Agency submits a community outreach plan to Congress.
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