On Wednesday February 15, the U.S. House of Representatives approved and sent to President Bush a bill to raise the borrowing authority of the National Flood Insurance Program (NFIP) to $21.2 billion to cover claims from Hurricane Katrina and other storms. The action came five days after the Senate approved the measure. Lawmakers said the amount approved would fund the flood insurance program through May. The $2.7 billion increase is less than half of the $5.6 billion increase the NFIP has told Congress is needed to pay anticipated claims through the end of 2006.

The latest increase in NFIP borrowing authority prompted some lawmakers to say they won’t support additional extensions until significant reforms to the program are made. The Senate Banking Committee has held hearings on reforming the program, and its chairman, Republican Richard Shelby of Alabama, says his panel will write legislation aimed at making it actuarially sound.

Until the hurricanes of 2005, the NFIP collected about $2.2 billion a year in premiums and fees and usually paid out about $1 billion in claims annually. Last month, NFIP director David Maurstad, told lawmakers that FEMA expects the program will face $23 billion in flood insurance claims from the 2005 hurricanes.

On November 15, PIA sent an updated series of proposals addressing NFIP reform to the members of the House Financial Services Committee. The proposals build on those PIA already submitted to a subcommittee of the House Financial Services Committee on October 20, and to the Senate Banking Committee on October 18.

PIA Makes Recommendations to Improve NFIP 
 
PIA Congressional Testimony on NFIP Reform (PDF file)
 
PIA Agents Call for Improvements to Flood Program (Insurance Journal 10/20/05)

February 22, 2006