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Statement By the National Association of Professional Insurance Agents

WASHINGTON, Thursday, September 9. 2010 - The National Flood Insurance Program (NFIP) continues to be treated like a political football in Congress. We...
September 9, 2010

WASHINGTON, Thursday, September 9. 2010 - The National Flood Insurance Program (NFIP) continues to be treated like a political football in Congress. We have seen many negative effects from the uncertainty that results every time Congress allows the program to expire, then renews it for a period of weeks or even just days. When expirations occur, real estate closings get delayed and property markets slow to a halt. If the goal of lawmakers is to spur economic recovery, continuing this pattern of expirations followed by short extensions of the flood program is counterproductive. The repeated failure of Congress to provide an adequate extension of the NFIP is also beginning to erode participation by Write Your Own carriers.

Right now, there is a possibility that Congress will consider an extension of the flood program through December 31, 2010. We believe this is problematic. It is not certain that there will be a substantive lame-duck session after the election. Passing an NFIP renewal that only runs through December 31 carries a high risk that the program will suffer yet another multi-week expiration that runs into January.

The best solution is for the Senate to now pass H.R. 5114, the Flood Insurance Reform and Priorities Act of 2010, which has already been passed overwhelmingly on a bipartisan basis in the House. H.R. 5114 extends the program for a full five years and makes key substantive reforms. The main issues of contention regarding the flood program -- its Katrina-related debt and the desire by some to add wind coverage to the program -- are not addressed in H.R. 5114 and can be dealt with in separate bills next year.

If action now on H.R. 5114 is not forthcoming in the Senate, lawmakers should pass an interim NFIP extension of sufficient length to avoid additional interruptions in the program and that allows sufficient time for hearings to be held next year.

It is critical that Congress break out of this almost decade-long pattern of "expiration-and-short-renewal" that has delayed real reform, caused periodic disruptions to the real estate market and undermined confidence in the flood program.

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.

 

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