WASHINGTON–The Senate Banking Committee is due to vote tomorrow on its version of legislation to reform the National Flood Insurance Program, in a format that will be largely the same as a bill approved by the committee last year.

Among the few differences between last year's Senate bill and this year's is a provision that would require the Government Accountability Office, in consultation with the Department of Homeland Security and the Inspector General's Office, to review the three largest contractors used by the Federal Emergency Management Agency to operate and manage the flood insurance program.

The legislation was singled out as a priority last year by Senate Banking Committee Chairman Chris Dodd, D-Conn., when he assumed control of the panel following Democratic victories in November.

The committee passed last year's version, under then chairman and current Ranking Minority Member Richard Shelby, R-Ala., unanimously. However, it failed to gain traction and was never brought up on the floor of the Senate.

Should the bill win Senate passage this year it would set the stage for a confrontation with the House, which has already approved its own legislation reforming the NFIP and significantly expanding the program by allowing the NFIP to offer windstorm coverage to homeowners who have purchased flood insurance.

Insurance industry groups have voiced strong opposition to the proposed expansion of the NFIP, and equally strong support for the Senate legislation.

Justin Roth, senior federal affairs director for the National Association of Mutual Insurance Companies, said the group was “very encouraged” with the Senate panel's work on flood insurance reform.

“While NAMIC supports the NFIP, we believe it is in need of much reform, and we believe the Senate bill goes a long way in addressing many of those reforms,” he said.

Among the key provisions, he said, was language that would phase in actuarially based rates for nonprimary residences or severe repetitive loss properties. NAMIC, Mr. Roth said, “believes those individuals who chose to purchase a second home in a disaster-prone area should be responsible for that risk, rather than having the American taxpayer subsidize their insurance.”

Ted Besesperis, a spokesman for the National Association of Professional Insurance Agents, criticized the House bill inclusion of wind coverage in the NFIP, noting that it could compound the issues facing the program.

“Allowing policyholders to purchase both flood and wind policies through the National Flood Insurance Program would inadvertently create more problems than solutions,” he said.

Additionally, he praised language in the Senate bill that would forgive the debt incurred by the NFIP to pay claims from Hurricanes Katrina and Rita, currently estimated at roughly $20 billion.

“If the NFIP debt is not forgiven, the program's future would be in serious doubt,” he said. During hearings on the flood program, FEMA officials as well as those from the GAO have argued that the NFIP, based on its current revenues, would barely be able to pay the interest on the debt it incurred after the 2005 storm season and even then only if claims remain below average.

“Eliminating the debt is crucial to the future of this program,” Mr. Roth said, “and we are pleased that the Senate took this necessary step.”

Mr. Besesperis echoed that sentiment, noting the program would be unable to meet future needs if it is forced to continue paying interest on the debt.

“We also support an appropriate level of debt forgiveness for the NFIP,” he said, “because it is necessary to forgive the program's structural debt to ensure the NFIP can build reserves for future flooding events.”