The Senate Banking, Housing, and Urban Affairs Economic Policy Subcommittee is scheduled to hold an oversight hearing Thursday to examine repetitive flood losses paid for by the National Flood Insurance Program. Expected to testify are members of Congress, the Federal Emergency Management Association (FEMA), producers and stakeholders in the program, including Greg Kosse, Associate General Counsel of Kentucky Farm Bureau Mutual Insurance Company.
“The Property Casualty Insurers Association of America (PCI) applauds Chairman Jim Bunning (R-Ky.), and members of the subcommittee for recognizing the importance of the National Flood Insurance Program (NFIP). PCI supports the NFIP as an essential component to respond to the devastating financial losses to families and communities nationwide caused by floods. The NFIP must be reauthorized before it expires on June 30, 2004,” said Carl Parks, senior vice president, federal government relations.
*a multi-year authorization of the NFIP in order to provide certainty and stability to the program prior to the June sunset date;
*the use of mitigation requirements as one method of dealing with the issue of repetitive loss properties;
*the pilot program of mitigation requirements contained in HR 253, the House-passed bill;
*the expansion of the pilot program to mitigate future repetitive losses if the pilot program proves successful; and
*language clarifying federal court jurisdiction over lawsuits arising out of the NFIP.
The National Flood Insurance Program (NFIP) was created in 1968 in response to the rising cost of disaster relief for flood victims. Today, nearly 20,000 communities voluntarily participate in the NFIP, adopting and enforcing floodplain management ordinances. In exchange, the NFIP makes federally-backed flood insurance available for residential as well as commercial properties. The program is managed by the Mitigation Division of FEMA, now a part of the Department of Homeland Security.
Last year, the House passed HR 253, the “Two Strikes and You Are Out of the Taxpayers Pocket Act of 2003.” This legislation provides a five-year reauthorization for the NFIP as well as makes fundamental changes in the program, specifically in the area of repetitive flood loss properties. This bill will be the starting point for Senate action. Currently, the Senate Banking Committee, which has jurisdiction over the NFIP is examining the House legislation and preparing for Committee and full Senate action.
“A long-term, multi-year reauthorization of this well-established program is vital to the U.S. economy, new and existing home purchasers, mortgage lenders, and the insurance industry,” said Greg Kosse, Associate General Counsel of Kentucky Farm Bureau Mutual Insurance Company.
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