The Independent Insurance Agents & Brokers of America (the Big “I”) said it supports Friday’s Senate vote on a bill, S. 2275, which would extend the borrowing authority of the National Flood Insurance Program (NFIP) to $21.2 billion.
The Federal Emergency Management Agency (FEMA) distributed a memo to Write-Your-Own companies Nov. 11 informing them that lines of credit were suspended until further Congressional action regarding an extension of borrowing authority.
With claims expected to exceed $23 billion, extended borrowing authority was necessary in order to meet consumer needs. Congress subsequently acted accordingly, increasing the borrowing authority to $18.5 billion on Nov. 18. This increase is expected to run out in the next few days, necessitating Friday’s laudable action by the Senate.
“We appreciate the Senate’s action to meet this need,” said Charles Symington Jr., Big “I” senior vice president for government affairs and federal relations. “Today’s action will help insurance buyers get the service they need and rightly expect. We thank the Senate for moving forward and getting this done for consumers who need and deserve assistance. We also hope the House will act as soon as possible to avoid any marketplace disruption.”
The initial borrowing limit of $1.5 billion from the U.S. Treasury was extended by Congress in the immediate wake of Hurricanes Katrina and Rita, but even this extension was reportedly inadequate to meet the anticipated claims.
“Today’s Senate vote to extend the NFIP’s borrowing authority is necessary and very welcome,” added Patrick O’Brien, Big “I” director of federal government affairs. “The busy hurricane season in 2005 completely overwhelmed the existing resources, and government action was the only way to alleviate the shortfall. We appreciate the Senate’s action on behalf of consumers.”
The Big “I” has actively supported needed reforms to the flood insurance system, including the extension of the borrowing authority and many other proposed changes. It released a comprehensive, 22-point flood modernization agenda in November, 2005. Chief among these are the addition of optional business interruption coverage on commercial policies, increases in the maximum coverage limits, and the inclusion of additional living expenses coverage for residential policies.
A number of the Big “I”-proposed reforms have been included in H.R. 4320, the National Flood Insurance Program Commitment to Policyholders and Reform Act, introduced Nov. 15, 2005, by House Financial Services Committee Chairman Mike Oxley (R-Ohio) and Ranking Member Barney Frank (D-Mass).
Was this article valuable?
Here are more articles you may enjoy.