The Senate bill also creates a mandatory reserve fund “to provide additional funding to help pay future claims without further need to seek contribution from the U.S. taxpayer,” said Sen. Richard Shelby, R-Ala., chairman of the committee. The bill passed the panel, 20-0.

The bill is being supported by the insurance industry, supporters said, because it would not reduce company or agent commissions. It calls for greater increases in premiums and more program tightening than the House bill, and will therefore theoretically increase industry revenues from the program.

During a March hearing, members of the Senate Banking Committee had called into question industry commissions and implied the Senate bill might seek to cut them to reduce the program's debt. But the bipartisan bill it approved today only called for a Government Accountability Office study of the commissions issue.

According to NFIP officials, industry commissions range from 30 to 32 basis points, and are determined annually. Of that, agents get 15 basis points, and 2-3 basis points are used to pay state premium taxes. Companies get the rest.

In introducing the bill today, Sen. Shelby, after touting the measure's benefits, warned that the “next fifteen months will also be critical to determine if the Federal Emergency Management Agency is up to the task of administering this program, or if this program should be reorganized into another federal agency.”

Melissa Shelk, American Insurance Association vice president for federal affairs, said AIA is “pleased that the legislation contains provisions to ensure the NFIP receives the necessary borrowing authority to pay the remaining flood claims from last year's hurricanes.”

David Winston, senior vice president of federal affairs for the National Association of Mutual Insurance Companies, said Sen. Shelby's legislation “establishes the framework for a federal flood insurance program that will be able to continue to serve policyholders in need of flood insurance while protecting American taxpayers.”

Charles E. Symington Jr., Insurance Agents & Brokers of America senior vice president for government affairs and federal relations, said the re-drafted bill's reforms are key to the long-term stability of the flood insurance program,” and it “is even more crucial now that hurricane season is upon us.”

Ernst Csiszar, president and CEO of the Property Casualty Insurers Association of America, called NFIP essential to “our nation's financial infrastructure,” and said the flood program works for consumers and communities.

The bill, known as the “Flood Insurance Reform and Modernization Act of 2006,” will require more modern flood maps and increase penalties for lenders who violate its requirements.