Congress extends National Flood Insurance Program to February

The federal government funding bill passed by the Senate Wednesday extends funding of the National Flood Insurance Program without any reforms until early next year.

The legislation, spearheaded by Speaker Mike Johnson (R-La.) passed with a bipartisan vote of 87-11, with 10 Republicans and one Democrat voting in opposition, according to The Hill. The continuing resolution, or CR, extends the NFIP to Feb. 2, 2024. The bill passed through the House of Representatives earlier this week with a vote of 336-95, with 93 Republicans and two Democrats voting no.

The NFIP’s current expiration date, along with the rest of the federal government, was set for November 17 at 11:59 p.m. if Congress did not act. President Joe Biden has indicated that he will sign the bill before the deadline.

This CR is unique in that it creates two tranches of government funding with different expiration dates. The departments of Veterans Affairs, Agriculture, Transportation, Housing and Urban Development; military construction; and energy and water programs are all extended until Jan. 19. All other programs – including the Federal Emergency Management Agency, which operates NFIP – are funded until Feb. 2.

The most recent long-term extension of the NFIP was a five-year reauthorization that expired in 2017 when Congress was unable to agree on reforms. This most recent bill marks the 27th short-term extension the program has received since then.

“We’re grateful that we avoided a lapse in the program," said David Maurstad, senior executive of the NFIP. "However, with this the 27th short-term extension, I remain concerned that our existing and potential policyholders will lose confidence in the NFIP. Meanwhile, we faithfully continue our work calling on Congress to consider FEMA’s proposed reforms of the program that I believe will help us close the flood insurance gap and reduce needless disaster suffering from the country’s number one natural disaster.”

Comprehensive reform needed

The NFIP’s debt, premium rates and resilience are just some of the areas that need comprehensive reform, said Diane Horn, a flood insurance and emergency management analyst for the Congressional Research Service, on Tuesday at the American Academy of Actuaries’ annual meeting.

“I would add two other [issues]: flooding outside of the floodplain and catastrophic events,” both of which are becoming more frequent, Horn said.

The NFIP also needs investment in agent training, updated mapping and a means-tested affordability program, according to a statement Thursday by the National Association of Professional Insurance Agents.

“However, Congress has been unable to agree on reforms to the program and another extension was necessary,” the organization said in the statement. “PIA will continue to work with lawmakers on the need to reform and reauthorize the NFIP on a long-term basis.”

FEMA did not immediately respond to a request for comment.

Ryan W. Neal has more than 14 years of experience as a reporter, including nine years covering the financial services industry. He formerly served as technology editor at Investment News. 

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