The National Association of Insurance Commissioners Encourages Congress to Reauthorize Flood Program
– Today Florida Insurance Commissioner Kevin McCarty joined other members of the NAIC leadership team with a letter
to Congressional leaders imploring Congress to reauthorize the National Flood Insurance Program (NFIP). The program, which insures over five million homes nationwide, is set to expire on September 30, 2010.
"It is reprehensible that Congress has not taken action sooner to reauthorize this essential program," said Insurance Commissioner Kevin McCarty. "Congress' inability to develop a long-term solution to insuring the peril of flood has created instability in Florida's already fragile housing market, and consequently, negatively impacted our economy."
Banks offering home mortgages require flood insurance for houses in known flood plains as part of the mortgage agreement. However, many national insurers do not directly offer flood insurance in known flood plains as this is sometimes considered an "uninsurable peril." This motivated the U.S. Congress to found the NFIP in 1968 to assist the U.S. housing market.
The program has expired several times, most recently on June 30, 2010. On July 2, 2010, President Obama signed the National Flood Insurance Program Extension Act of 2010, but this only extended NFIP authorization through September 30, 2010. The NAIC letter, which is critical of Congress' actions, also stressed problems associated with the continued uncertainty of the future of this program.
For more information about the National Flood Insurance Program, you may visit the Federal Emergency Management Agency’s Web site.