In what’s beginning to sound like a recurring nightmare, the National Flood Insurance Program (NFIP) is once again close to expiring. The latest stop-gap authorization for the NFIP runs through May 31. If Congress fails to pass an extension, the flood program will again lapse.

In the House, Financial Services Committee Chairman Barney Frank (D-Mass.) has introduced legislation to extend the federal flood insurance program to September 30, 2010. In the Senate, a bill has been filed extending the program through December 31, 2010.

A separate bill, the Flood Insurance Reform Priorities Act of 2010 (H.R. 5114), was approved by the House Financial Services Committee. It would reauthorize the program for five years and make other reforms, including increasing NFIP coverage limits, phasing in actuarial property rates and phasing out premium subsidies for second and vacation homes and making business interruption and additional living expense coverages available at actuarial cost. But H.R. 5114 has yet to pass the House or advance in the Senate.

What It Means to Agents: While progress has been made toward a full, five-year reauthorization of the NFIP, action on that bill is slow. In the meantime, yet another short-term reauthorization of the flood program is needed to avert the third lapse in NFIP this year. Congress will be straining to adjourn for its Memorial Day recess later this week. Lawmakers must extend the NFIP before leaving town.

May 26, 2010