On July 2, 2010, President Obama signed into law an extension of the National Flood Insurance Program, good until Sept. 30.
The bill is H.R. 5569, the “National Insurance Program Extension Act of 2010.” It is retroactive to June 1, when the authorization for the program lapsed for the fourth time in recent years.
The bill also reduces the borrowing authority of the Federal Emergency Management Agency, which runs the program, by $50 billion to $20.725 billion.
Action on a longer-term extension was delayed because the program has a deficit nearing $20 billion, but Congress is reluctant to act to reduce it because raising rates to “market level” generates severe criticism from hard-pressed homeowners.
Jessica Hanson, a spokesperson for the Property and Casualty Insurers Association of America (PCI), said that in the wake of the President's signing of the bill, PCI hopes that “Congress will consider a long-term solution for the flood insurance program before the August recess.”
She said that while PCI is pleased the new extension was signed into law, “September will be here very soon. This three-month extension threatens to leave communities and the marketplace vulnerable again at the end of September, at the height of hurricane season.”
Hanson added that the organization continues to support legislation introduced by Rep. Maxine Waters, D-Calif., that provides an important five-year extension and “takes a responsible approach to making the flood program more financially stable.”
By Arthur D. Postal, Washington Bureau Chief for National Underwriter, P&C
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