Washington--Legislation allowing the National Flood Insurance Program to resume paying claims was passed by Congress late Friday and is now headed to the White House for signature.
The House approved a measure that accedes to legislation passed by the Senate. It raises the NFIP's borrowing authority to $18.5 billion--a $15 billion increase.
Congress is expected to work on legislation when it resumes work the week of Dec. 5 that would increase the borrowing authority by an additional $4.5 billion and impose reforms demanded by Congress to make the program more accountable, according to the Financial Services Roundtable.
These additional funds are likely all that is needed to cover current and expected claims from the recent storms, the FSR said.
The National Association of Mutual Insurance Companies said in a release to its members over the weekend that it expects the NFIP to inform insurers today "that their line of credit has been extended and they should resume paying claims immediately."
David Winston, senior vice president of government relations for NAMIC, said that when Congress returns in January, it will likely take up legislation to further extend NFIP's borrowing authority, "so that the remaining $7-to-$15 billion dollars in expected claims can be paid expeditiously."
However, Mr. Winston said, "many members of Congress have indicated that any additional funding will be contingent on several possible reforms of the NFIP."
Among the possible reforms is mandatory coverage for everyone who lives in the natural 100 year flood plain, extending the flood zone to 1-500 year flood zones, and increasing the level of coverage from the current maximum of $250,000, Mr. Winston said.
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