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PIA Letter to House Opposes Expansion of Flood Insurance Program to Cover Wind Risks

WASHINGTON, Wednesday, July 21, 2010 - The National Association of Professional Insurance Agents (PIA) has sent a letter to all members of...
July 21, 2010

Insurance Agents Voice Opposition to Multiperil Insurance Act (H.R. 1264)

WASHINGTON, Wednesday, July 21, 2010  -   The National Association of Professional Insurance Agents (PIA) has sent a letter to all members of the U.S. House of Representatives, urging that they vote against the Multiperil Insurance Act (H.R. 1264), which would expand the mandate of the National Flood Insurance Program (NFIP) to cover wind risks.

"H.R. 1264 will add a peril to the program that does not belong there because coverage for wind damage is available in the private market and through state wind pools," the PIA letter states. "While Representative Taylor's bill is well intentioned, adding this to the NFIP would place undue burdens on the program and would be another example of the federal government taking control of an insurance product, all while undermining the private market. The current system assures a robust insurance marketplace with capacity to meet the needs of consumers."

The PIA letter noted that the Administration has expressed its opposition to this proposal on several occasions. Both U.S. Homeland Security Secretary Janet Napolitano and FEMA Administrator Craig Fugate have spoken against it. Napolitano said federal wind coverage could adversely affect competition and selection among the various state and private offerings. Fugate testified before the House Financial Services Committee that "under a multi-peril federal program, the liability for multi-peril insurance, which is currently absorbed by the private property insurance market, would be transferred to the U.S. Treasury and, ultimately, to the American taxpayer."

"PIA opposes H.R. 1264 because it is bad public policy," said PIA National Director of Federal Affairs Mike Becker. "A federal government takeover of wind insurance is unjustified and unwarranted. It would undermine the private market and risk increasing the debt of the NFIP, sending the bill to taxpayers."

"While the Congressional Budget Office (CBO) recently opined that premiums should be adequate to cover wind and flood claims, the Government Accountability Office (GAO) and FEMA officials believe that adding wind to the NFIP increases the risk of the program incurring significantly more debt," the PIA letter states. "It is clear that now is not the time to add an additional peril that has the risk of greatly compromising the future of the program. The necessary reforms, many of which were addressed in the recently House passed H.R. 5114, work in the direction of placing the program on sound footing."

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America (SM). PIA's web address is www.pianet.com.

Click here to view PIA's letter to House members.


 

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