As Congress returns for what is expected to be a shortened pre-election session, one item still on the agenda is reauthorization of the National Flood Insurance Program (NFIP). If the U.S. House and Senate do not pass identical bills by September 30, the flood program will expire.

In May, the U.S. Senate passed legislation that would extend the NFIP through 2013, phase in actuarially sound rates for nonresidential and nonprimary residences, and forgive the NFIP’s debt, estimated at nearly $18 billion. The bill also creates an executive branch overseer to police “Write Your Own” insurers, as well as an expert commission that will report to Congress on ways to address the availability of catastrophe coverage in high-risk areas.

The vote sets up a potentially contentious conference with U.S. House leaders, whose version of the legislation, the Flood Insurance Reform and Modernization Act, would offer NFIP policyholders the option to purchase multiperil coverage with limits of $500,000 for residential properties and $1 million for commercial properties.

What It Means to Agents:  Congress must act to renew the National Flood Insurance Program.

September 3, 2008