AIA: Senate Charts Sound Course for Renewing Federal Flood Program

Gov. Marc Racicot, president, American Insurance Association (AIA), said Tuesday the U.S. Senate chose the more thoughtful path to strengthening the National Flood Insurance Program (NFIP) by approving reforms that put the program on sound financial footing in a bill (S. 2284) that reauthorizes the program for five years.

“We appreciate that an overwhelming bipartisan majority of the Senate was reasonable in its approach to reauthorizing and reforming the NFIP," Racicot said. "AIA supports provisions in S. 2284 that increase funding to update the program’s flood maps, restructure its premium rates, expand mandatory coverage areas, and forgive the NFIP’s $17 billion debt.

"We also support the Senate’s provision establishing a nonpartisan commission as the most efficient and effective approach to assessing natural catastrophe risk management.

“The Senate also showed good judgment by not adding wind coverage to the NFIP and giving strong consideration to the findings of the Government Accountability Office study that warned of the operational challenges and possible financial consequences of adding wind coverage to the NFIP. Increasing the operational burden on the NFIP is unnecessary given that there is adequate wind coverage capacity in every state through either the traditional private market, or state residual markets backed by private insurers.

“AIA looks forward to working with the Senate and House to reconcile the differences in their NFIP reauthorization bills in a manner that improves the program and promotes fiscal soundness.”