After months of negotiations, the U.S. House and Senate have not yet reached a consensus regarding a flood reform package. Instead, in an effort to renew the National Flood Insurance Program (NFIP) and restore its fiscal soundness, the Senate enacted a package in September that will ensure funding through March 6, 2009.
Congress initially established the vital program with the passage of the National Flood Insurance Act of 1968. The NFIP enables property owners located in participating communities to purchase insurance as protection against flood losses in exchange for state and community floodplain management regulations that reduce future flood damages.
The overall goal is for long-term reform, which this extension does not fulfill. The National Association of Mutual Insurance Companies (NAMIC) expressed disappointment that negotiations in the past months had not been fruitful in that regard. Nonetheless, Independent Insurance Agents & Brokers of America (the Big “I”) and Property Casualty Insurers Association of America (PCI) lauded the short-term extension, which is considered by both organizations to be a noteworthy development for insurance consumers. Had the program been allowed to expire, millions of consumers and small businesses would have been left lacking protection from flood-related damage just as hurricane season gained momentum.
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