Rims hails NFIP extension as ‘big win’ for risk profession

US risk management society Rims said an extension of the US’s National Flood Insurance Program (NFIP) to the end of this year is a “big win” for risk managers.

Rims said it is encouraged by the new legislation, passed by Congress and signed by President Joe Biden, and will now work towards a longer extension.

The risk management body said an extension of the scheme late last week to 16 December 2022, just as hurricane Ian cut a path across Florida, avoids a dangerous lapse in coverage and will continue to provide critical financial support to residential and commercial properties at risk of flooding.

Rims president Patrick Sterling said: “Rims is encouraged by this bipartisan effort and will continue to work with our partners on Capitol Hill to support the development of a longer-term extension in December.

“Risk professionals count on the NFIP to protect our organisations’ assets and to remain in good standing with our commercial real estate contracts,” he added.

Rims CEO Gary LaBranche said risk professionals from across the US met at the Rims Legislative Summit to share their concerns with Congress representatives about the NFIP not being extended.

“Working together, the Rims community can effect change and empower risk leaders to help make the world safer, more secure and more sustainable,” LaBranche said.

The US Federal Emergency Management Agency (FEMA), which manages the NFIP, said it has never failed to honour flood insurance contracts. “Should the NFIP’s authorisation lapse, the FEMA would still have authority to ensure the payment of valid claims with available funds,” it said. But the FEMA said it would stop selling new and renewing policies if the NFIP ever ends.

“NFIP reauthorisation is an opportunity for Congress to take bold steps to reduce the complexity of the programme and strengthen the NFIP’s financial framework, so that the programme can continue helping individuals and communities to take the critical step of securing flood insurance,” the FEMA said.

“The level of damage from recent catastrophic storms makes it clear that the FEMA needs a holistic plan to ready the nation for managing the cost of flooding under the NFIP,” it added.