He particularly cites the NFIP's nearly $18 billion in debt and noted the program's problems in servicing that debt. 

At the same time, an administration official testifies that during a period when the federal budget is under intense scrutiny, the Obama administration also sees a need to reduce the scope of the program.

Craig Fugate, FEMA administrator, says concerns remain about the program after 42 years of program operation.

Sen. Tim Johnson, D-S.D., committee chairman, was more optimistic. He says that before the current authorization runs out Sept. 30, "I hope that we can once again come together and pass a bipartisan bill that will build a sustainable future for the program and American citizens."

After more than a decade of seeking input, identifying issues, and undergoing studies, "FEMA believes that the time has come to undertake a critical review of the NFIP," Fugate says.

"As members of this committee and others in Congress consider NFIP reform, the Department of Homeland Security and the administration is prepared to assist those efforts as appropriate," he adds.

Shelby cites the Write Your Own insurance companies, noting that the Government Accountability Office recommends that the Write Your Own program have more transparency and accountability.

"This is something we should pursue," he says.

Moreover, Shelby says the committee "should examine the types of properties the flood insurance program is covering to ensure that its resources are spent effectively." 

The hearing was held against the background of pending House floor action on legislation reauthorizing the program through Sept. 30, 2016 that was reported out May 13 by the House Financial Services Committee.

The bill is H.R. 1309, the Flood Insurance Reform Act of 2011.

A key component of the bill is a provision that, for the first since the program was launched in the 1950s, opens the door for the private market to play a strong role in insuring against flood, primarily through reinsurance.

The only action on flood insurance in the Senate so far was introduction May 26 of legislation that would, amongst other provisions, seek to deal with the sensitive wind-versus-water issue.

The bill is the Consumer Option for an Alternative System to Allocate Losses Act of 2011, or COASTAL Act, S. 1091.

The bill was introduced by Sen. Roger Wicker, R-Miss. It would create a "standardized loss allocation" system to distribute losses between the National Flood Insurance Program and private or residual-market-provided wind insurance following the total loss of any property that carries both flood and wind insurance.

Inclusion of such provision as anti-concurrent causation exceptions in standard personal lines insurance contracts in Mississippi generated huge controversy when insurers refused to honor claims resulting from Hurricanes Katrina and Rita in 2005—hence the interest of a Mississippi senator in this issue.