The House Financial Services Committee marked up HR 3121, “The Flood Insurance Reform and Modernization Act of 2007.” The final bill was reported out of the committee on Thursday July 26 by a vote of 38 to 29.

The main sticking point with this reform bill was the addition of Rep. Gene Taylor’s (D-Miss.) Multiple Peril Act to the larger reform bill. This is an effort to combine wind and water coverage together under the National Flood Insurance Program (NFIP). For a variety of reasons, this effort creates more problems than solutions. The logistical implications of this policy poses tremendous unintended consequences.  An amendment was offered by Rep. Brown Waite (R-FL) to strike this language and replace it with a study, but it was defeated on a party line vote.

What It Means to Agents:  PIA is pleased the flood proposal is moving forward.  However, we continue to be disappointed by and oppose the House’s inclusion of the Rep. Taylor's language attaching a multi-peril (wind) coverage.  PIA understands, appreciates and agrees with the challenge that Rep. Taylor is trying to resolve for constituents, that is to be sure that people have coverage that will respond no matter whether the damage is from flood, wind or water surge.

The specific approach Rep. Taylor has selected and now is in the House version is highly defective and will not resolve the fundamental problem.  It just adds more cost for insurance coverage for consumers and increases the number of parties and coverage forms that could be drawn into a claims coverage controversy. PIA is working with the Senate to fix this problem aspect of the bill, because Members of Congress must vote for real solutions, not another set of empty promises.

July 31, 2007