Reforms to the National Flood Insurance Program will be a priority on the U.S. Senate Banking Committee agenda when lawmakers return to Washington later this month, following a remedial initiative already well underway in the House.

The NFIP was the subject of a number of Senate Banking Committee hearings last fall after massive losses incurred during Hurricane Katrina overwhelmed the federal insurance program–and it was learned that many who should have purchased the coverage did not.

At the time, David Maurstad–then acting administrator and director of mitigation for the Federal Emergency Management Agency–was hammered with criticism from lawmakers over the NFIP's financial problems and the slow implementation of previously passed reforms.

The Senate version of an NFIP reform bill will be introduced by Sen. Richard Shelby, R-Ala, who chairs the Banking Committee, and is expected to include many of the changes made to the program in House legislation, in addition to other alterations.

The House version–H.R. 4973, the Flood Insurance Reform and Modernization Act–was passed by the House Financial Services Committee in March and is awaiting a vote on the House floor. The sponsors are Rep. Richard Baker, R-La., who chairs a key financial services subcommittee, and Rep. Barney Frank, D-Mass., the ranking Democrat on the Financial Services Committee.

The NFIP reforms are designed to bring more consumers into the system while gradually reducing subsidies for properties built before national flood maps were developed.

Under the House bill, property owners would be charged actuarially sound rates for nonprimary residences, such as second homes and vacation properties.

Andrew Gray, a representative for Sen. Shelby, declined to comment on the substance of the Senate bill, which is being drafted by staff and has yet to be completed. However, he said the bill would likely be introduced and taken up by the committee in the last week of April, when lawmakers return from recess, or in early May.

Among the potential targets for cuts in the flood insurance program are administrative costs–including the reimbursement to insurers under the Write-Your-Own program, in which insurers sell flood coverage under their own names on the NFIP's behalf, then are reimbursed for the expenses of administering those policies and claims.

In hearings last fall, the Senate committee was told that roughly half of the NFIP's $2 billion in annual premium revenue is spent on administrative expenses. With that burden, Sen. Shelby concluded it is unlikely NFIP would ever be able to repay the $24 billion it has borrowed to cover losses in the wake of Hurricane Katrina.

Although the proposed reforms could reduce their reimbursement from the program, insurance groups are focusing more on the potential benefits of reform legislation.

“Obviously there are good and bad changes that could be made,” said Scott Duncan, a representative for the Property Casualty Insurers Association of America. “We're just happy that they're looking at it in a comprehensive way after last season's hurricanes.”