Another Florida representative put into the record a letter from the National Association of Realtors explaining how important reauthorizing of the legislation is to the struggling housing market.

But Rep. Candice Miller, R-Mich., used the occasion to complain that people in the Great Lakes Basin and other areas with little flooding are "being treated unfairly" because new flood maps mandated by a 2004 reauthorization of the program are raising their flood insurance rates.

"Our residents are being abused by the Federal Emergency Management Agency," she said. "We very rarely make claims and, effectively, we are being used to subsidize other states which have a number of claims."

She added that "if that is the case, I call for a national catastrophe program where everyone pays for flood insurance."

The bill was introduced by Rep. Maxine Waters, D-Calif., chair of the Housing and Community Opportunity Subcommittee of the House Financial Services Committee.

The temporary reauthorization is needed because H.R. 4213 (http://bit.ly/c3E7E1)–a jobs bill that also contains an NFIP extension until Dec. 30–is stuck on the Senate floor due to budget considerations.

Although extending the flood insurance program is not controversial and, in fact, has widespread support, it has been lumped into H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010, which includes extensions of jobless benefits, Medicare payments to doctors and business tax breaks.

The inability to find revenues to pay for the tax cuts and other provisions in that bill has held up consideration and resulted in many versions of the bill being rejected on the Senate floor.

The National Association of Professional Insurance Agents (www.pianet.com) sent a letter to the Senate on June 18 urging prompt action on the extension and noting that the NFIP "has slipped into a hiatus."

"This is a serious situation, and the lack of action by Congress is irresponsible," said PIA National President-elect Brian Marino, co-chair of PIA National's working group on natural catastrophes. "Since the NFIP lapsed, 20 people lost their lives in flash floods in Arkansas, and in May, 29 people were killed in extreme flash flooding in Tennessee, Mississippi and Kentucky. Property damage was extensive everywhere. Allowing the flood insurance program to lapse is just not an acceptable option."

Mr. Marino added that while no new policies can be issued during a lapse in NFIP authorization, consumers with current flood insurance policies remain covered. Claims payments are not affected.

CROP COVER UPDATE

Meanwhile, crop insurers warned that the industry's "back is against the wall" as they reiterated objections to a planned 30 percent cut to the federal crop program. (See http://bit.ly/bfsg2t for more NU coverage.)

The new cut, constituting $6 billion over 10 years, is in addition to the 12 percent cut imposed on the program through the 2008 farm bill that is just going into effect now.

Agents will be particularly hard hit, warned Bob Parkerson, president of the National Crop Insurance Services (www.ag-risk.org), although he said at least two of the 16 insurers in the program have warned that they may be unable to live with the cuts.

"Agents have taken a tremendous cut. They have been singled out," he said.

According to Mr. Parkerson, agent commissions were cut more substantially in Corn Belt areas–the Midwest–than in other areas. "They said they are rebalancing the program by making it less profitable in the Corn Belt and more profitable in other areas," he added.

Mr. Parkerson said 18-to-20 percent of premium is the average commission for agents, but some go higher. The cuts will drop commissions to 14-to-15 percent nationally, he noted, calling that "a very sharp drop."

Charles Symington, senior vice president of government affairs for the Independent Insurance Agents and Brokers of America (www.iiaba.net), called the decision "unprecedented."

"The cap on an agent's earning potential does not impact the crop insurance budget or save the taxpayer any money, and needlessly weakens an already struggling agricultural economy," he said.

The new cuts will go into effect for the 2011 fiscal year, according to the U.S. Department of Agriculture (www.usda.gov).

In a statement, USDA officials said two-thirds of the savings from the cuts will go toward paying down the federal deficit, and the remaining third will support high-priority risk management and conservation programs.

Mr. Parkerson said the NCIS, which represents the 16 crop insurers, has been in the federal program for 30 years. "Our back is against the wall," he said. "This is a very substantial cut."

As Congress continues to debate another farm bill, Mr. Parkerson said, "You can't take any more out of this program without totally altering what farmers and ranchers have come to expect from this program."