On May 25, the Senate Banking Committee will mark up legislation overhauling the National Flood Insurance Program (NFIP). According to published reports, the Flood Insurance Reform and Modernization Act of 2006 (which has not yet been assigned a bill number) would phase certain properties out of subsidized rates, require more modern flood maps and increase the penalties for lenders who violate requirements. It would also require stricter compliance with mandatory insurance coverage and increased participation in the program.

As currently drafted, the bill reportedly would authorize the secretary of the Treasury to provide funds sufficient to cover the flood insurance program's obligations stemming from the 2005 hurricane season. The bill would also forgive obligations the program owes to the U.S. Treasury for the 2005 hurricane season, however the legislation would also require the Federal Emergency Management Agency, which administers the program, to provide a repayment plan to Congress and the Treasury secretary when it uses its borrowing authority with the Treasury.

The office of Senate Banking Committee Chairman Richard Shelby (R-Ala.) says amendments will be allowed during this week’s mark up. Shelby has been trying to forge a consensus on NFIP reform legislation. PIA will attend the committee mark up.

PIA Letter to Senate Banking Committee (5/24/06)

May 26, 2006