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NFIP Hearing Slated, GOP to Introduce Bill, PIA Comments

There will be a hearing on Friday March 11 on "Legislative Proposals to Reform the National Flood Insurance Program." The hearing has been called by...
March 8, 2011

There will be a hearing on Friday March 11 on "Legislative Proposals to Reform the National Flood Insurance Program." The hearing has been called by Rep. Judy Biggert (R-Ill.), chairwoman of the Insurance, Housing and Community Opportunity Subcommittee of the House Financial Services Committee.

The discussion draft of a new bill, the Flood Insurance Reform Act of 2011, has just been released by the subcommittee. It provides for a 5-year reauthorization of the program, a move toward instituting actuarially sound rates and the formation of a Technical Mapping Advisory Council, which we are hopeful will be successful in depoliticizing the process of remapping.

PIA National issued an initial statement on the draft legislation, praising Rep. Biggert for beginning to address NFIP reform issues and advancing a bill. However, PIA expressed concern with language in the bill calling on FEMA and the GAO to conduct a study on privatization and requiring that recommendations be made within 18 months on how to bring about privatization of the NFIP.

"We believe that privatization of the program is not a panacea and that solving the financial challenges facing the NFIP require addressing two areas: rates and the status of the program's existing debt," said Mike Becker, national director of federal affairs for PIA, in a statement to the National Underwriter.

"More than anything else, what ails the NFIP is the continuing presence of this old debt due to the 'shock losses' incurred as a result of a series of major, unpredictable catastrophic storms in 2004 and 2005," the PIA statement says. "The program was fiscally sound before this period, and will be sound again only after Congress finally addresses what can best be described as these 'Katrina costs.' PIA feels it is necessary to stop pushing these costs forward and finally pay off this Katrina debt."

Click here to read PIA Comments in NFIP Article (National Underwriter 3/7/11)

Click here to read PIA Statement on NFIP Draft Bill (3/7/11)

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