Obama Signs Retroactive Flood Insurance Extension
Copyright 2010 SNL Financial LCAll Rights Reserved SNL Insurance Weekly Property & Casualty Edition
April 19, 2010
Obama signs retroactive flood insurance extension
The bill extends authorization for the federal flood program until May 31. It had lapsed March 28.
President Barack Obama has signed legislation retroactively extending authorization for the National Flood Insurance Program through May 31, the eve of the June 1 start of the 2010 hurricane season.
Included as part of H.R. 4851, a bill that also provides for short-term extensions of federal unemployment insurance benefits and assistance with COBRA premiums for laid-off workers, the extension was signed by the president late April 15 after clearing both the Senate and House earlier in the day.
The flood program lapsed when Congress failed to pass an extension ahead of its March 28, 2010, expiration. The March 29 to April 15 period marked the second time the 42-year-old flood program has gone into hiatus in 2010. The NFIP earlier expired Feb. 28 and did not receive a temporary extension until March 2.
During the hiatus period, the NFIP, which is run by the Federal Emergency Management Agency but administered primarily through private insurers who are paid to market and service policies, could not write or renew policies but continued to provide existing coverage and to pay claims. The hiatus coincided with major coastal flooding in the Northeast, particularly in Rhode Island. FEMA has not yet provided estimates for the effect of the Northeast storms on the NFIP, which already owes billions to the U.S. Treasury, mostly because of claims and interest arising from the 2005 hurricane season.
"Families living in flood-prone areas can now obtain the coverage they need and move on with their lives," American Insurance Association spokesman Blain Rethmeier told SNL. "We're glad the program has been extended and look forward to working with Congressional leaders to enact more meaningful reform rather than continuing to pass extension after extension."
The House Financial Services Committee has scheduled an April 21 hearing to look into proposed reforms to the program, including a proposal to begin offering optional windstorm coverage. The panel also has tentatively scheduled a mark-up on flood insurance legislation for April 22.
April 23, 2010