Pascrell & Pallone Urge FEMA to Issue Flood Insurance Policies During Trump Shutdown

WASHINGTON, Dec. 27 -- Rep. Bill Pascrell Jr., D-New Jersey, issued the following news release:

Today, U.S. Representatives Bill Pascrell, Jr. (D-NJ-09) and Frank Pallone, Jr. (D-NJ-06) sent a letter to FEMA administrator Brock Long urging the agency to resume the activities of the National Flood Insurance Program (NFIP) during the Trump shutdown. While many departments and agencies remain without funding, Congress passed an extension of NFIP's authorization last Friday so the program could continue to issue flood insurance policies.

Despite this extension, FEMA issued guidance Wednesday, December 26 claiming NFIP insurers may not collect premiums for the issuance, renewal, or monetary endorsements of NFIP policies because doing so would cause the government to incur obligations without an appropriation. However, the sale of new policies is funded by the National Flood Insurance Fund, not discretionary appropriations.

"The NFIP successfully helps individuals and communities secure flood insurance," Reps. Pallone and Pascrell write. "Suspending the program because of Trump's decision to close the government will cause additional needless suffering for our constituents and the long-term health of the NFIP."

Last week, Pallone and Pascrell helped defeat a last-minute GOP effort to add a controversial giveaway to insurance companies as part of an extension of the National Flood Insurance Program (NFIP) at the expense of policyholders and taxpayers. The Congressmen have also been leaders in demanding transparency and needed reforms for the program and are supporters of H.R. 3285, the Sustainable, Affordable, Fair, and Efficient (SAFE) National Flood Insurance Program Reauthorization Act, bipartisan legislation that would provide long term reauthorization for NFIP.

Text of the letter can be found below:

December 27, 2018

The Honorable Brock Long

Administrator

Federal Emergency Management Agency

500 C Street SW

Washington, D.C. 20472

Dear Administrator Long:

We write to inquire about the decision to prevent all National Flood Insurance Program (NFIP) insurers from issuing or renewing policies because of Donald Trump's government shutdown. Additionally, we write you to question the administration's preparedness for the shutdown. Since Congress passed an authorization for the NFIP on the eve of the shutdown, we believe this decision runs counter to congressional intent to keep the NFIP operational through May 2019. On behalf of our constituents who rely on the NFIP, we urge you to resume the activities of the program.

To alleviate any confusion about the status of the NFIP during a shutdown, Congress passed, and the President signed, legislation specifically extending authorization for the program. The NFIP is critical for our constituents and millions of homeowners across the country who rely on the financial protection the program provides from the risks of flooding. Shuttering the NFIP prevents borrowers in flood-prone areas who are required to obtain flood insurance when acquiring a mortgage for a new home from doing so. Thus, we believe Federal Emergency Management Agency's (FEMA) decision to prevent new policies from being issued will create problems for the real estate market across the country.

In its Wednesday, December 26 guidance, FEMA claimed NFIP insurers may not collect premiums for the issuance, renewal, or monetary endorsements of NFIP policies because doing so would cause the government to incur obligations without an appropriation. However, the sale of new policies is funded by the National Flood Insurance Fund, not discretionary appropriations. It is contemptible that it took over 110 hours into the shutdown for FEMA to issue guidance on the NFIP for insurers. Being unprepared for a shutdown caused confusion for agents and homeowners about renewing a policy on or after 12:00am Saturday, December 22, 2018. Now, FEMA claims these individuals must wait until the government reopens to know if their home will or will not be insured. This delay and uncertainty for insurance policies sold since Saturday is unacceptable.

The NFIP successfully helps individuals and communities secure flood insurance. Suspending the program because of Trump's decision to close the government will cause additional needless suffering for our constituents and the long-term health of the NFIP. If the damage from the recent hurricane season makes anything clear, it is that NFIP is nationally significant to ensuring our nation can manage the cost of catastrophic flooding. To clarify the confusion, we believe you have the authority to resume the functions of the NFIP under the Antideficiency Act (31 U.S.C. 1342) to spare further negative impacts to property and our economy. We request you provide our staff details on the number of policies attempted to be sold by NFIP insurers since the start of the shutdown. Additionally, we urge you to clarify the status of these policies for homeowners.

We look forward to your prompt response.