NFIP reauthorisation to 2022 passed by House of Representatives
Risk management society RIMS has called on the US Senate to follow the lead of the House of Representatives this week and reauthorise the National Flood Insurance Program (NFIP) before it expires on 8 December. Reauthorisation under the proposed House bill would extend the NFIP until 2022.
Welcoming the decision by the House of Representatives on Tuesday, RIMS vice-president Robert Cartwright said: “RIMS is thrilled that the House has taken the initiative to examine, understand and reauthorise the National Flood Insurance Program.” The House voted 237 to 189 to pass the Flood Reform Act, a package of bills that includes the NFIP.
Mr Cartwright urged the US Senate to follow suit. “It is now the Senate’s turn. The NFIP’s expiration would have significant repercussions, impacting both corporate and residential property owners.”
The NFIP, which provides US small and mid-sized commercial businesses and homeowners with flood cover, has run into debt. The recent trio of hurricanes in the US has squeezed finances further. President Donald Trump has requested emergency funding to ensure claims are met following Hurricanes Harvey, Irma and Maria. RIMS estimated that the NFIP’s combined losses from Harvey and Irma would range between $9.5bn and $15.5bn.
According to the Insurance Journal, the Flood Reform Act passed by the House features several reforms to the NFIP, including the potential for more private flood insurers to provide cover and sell their own policies. There would also be a requirement on the Federal Emergency Management Agency to disclose historic flood loss data with private insurers. Other reforms include flood mapping, a cap on annual premium increases and measures to reduce the costs of repetitive loss properties.
The Senate could introduce further reforms, or make changes to the House proposals.
RIMS has launched a NFIP grassroots advocacy initiative to support the programme and as part of lobbying efforts to see it reauthorised. “Our grassroots effort provides yet another vehicle for our members to get involved in the legislative process and emphasises the criticality of this program’s existence,” Mr Cartwright said.
Speaking to CRE in October, RIMS CEO Mary Roth said the association would lobby for the NFIP to be extended beyond 8 December, and for the risk management community to be involved in discussions about its long-term future. Ms Roth added that the private insurance market will likely play a bigger role in transferring flood risk going forward, to ensure the NFIP is sustainable.
