Posted by Benji Riggins on September 20, 2010 under Flood | 
The National Flood Insurance Program (NFIP) is set to expire on Sept. 30, just as the 2010 Atlantic Hurricane Season reaches its height.
Insurers are urging Congress to take immediate action to reauthorize the federal insurance program.
“Congress returned from recess … and there is still not a clear path for the NFIP reauthorization,” said Ben McKay, senior vice president of federal government relations for the Property Casualty Insurers Association of America (PCI). “We are very concerned that this will lead to another NFIP lapse.”
Since 2008, NFIP has been operating under a series of short-term extensions. This year alone, Congress has already allowed the program to lapse four times. During these lapses, new flood insurance policies could not be written, leaving homeowners vulnerable and delaying thousands of real estate transactions per day in flood-prone regions.
On July 2, President Obama signed into law the latest short-term NFIP extension following a four-week program hiatus. The NFIP is now set to expire again on Sept. 30.
In addition to urging a long-term extension of NFIP, the industry and others want Congress to reform the program to address its more than $18 billion debt. The interest alone on this debt is almost $1 billion a year, according to PCI.
Read more: http://www.insurancejournal.com/news/national/2010/09/20/113357.htm#ixzz106W0iZ23
Posted by Benji Riggins on July 1, 2010 under Flood |
The U.S. Senate last night approved a temporary reauthorization of the federal flood insurance program until Sept. 30. The reauthorization of the National Flood Insurance Program (NFIP) is retroactive to June 1, the date the program was halted.
The unanimous Senate vote sent the measure to President Barack Obama for his signature. The House had previously approved reauthorization.
Once President Obama signs the bill into law, the NFIP should return to normal operations, according to the Independent Insurance Agents & Brokers of America (the Big “I”). Also, since the extension is retroactive, any new policy applications or renewals that were signed and submitted during the hiatus will be effective from the date of application or, in the case of waiting periods, the waiting period will start from the date of application.
The Big “I” said that while the resumption of the program is welcome, the spring lapse — the third time this year it has been forced to halt operations– has caused difficulties for homeowners and small businesses.
“It is alarming that the NFIP was allowed to remain expired for so long, causing so much confusion and potentially leaving desperate homeowners and small businesses unprotected for almost a month,” said Robert Rusbuldt, Big “I” president and CEO. “While the Big ‘I’ is appreciative of Congress extending the program on a temporary basis, we are also greatly concerned that these short expiration periods and patchwork of temporary extensions will negatively impact the market.”
The industry has urged Congress to enact a long term extension of the program.
“The hurricane season runs two months beyond the NFIP’s new Sept. 30 expiration date,” said Jimi Grande, National Association of Mutual Insurance Companies (NAMIC) senior vice president of federal and political affairs. “Congress must not let the program lapse again, but that’s just the minimum. The best thing they can do is take this time to pass legislation that would implement common sense reforms and help the NFIP make the first steps towards financial soundness.”
HR 5114, sponsored by Rep. Maxine Waters, D-Calif., is awaiting action by the House and would reauthorize the NFIP for five years.
Read more: http://www.insurancejournal.com/news/national/2010/07/01/111226.htm#ixzz0sRmFmA6x
Posted by Benji Riggins on June 23, 2010 under Flood |
The House of Representatives has passed another temporary extension of the National Flood Insurance Program until Sept. 30, 2010.
The program has been suspended from issuing new policies since May 31. Reauthorization provisions have been embedded in controversial legislation on jobless benefits and tax breaks that has been twice voted down in the Senate.
The newly-passed House bill, HR 5569, was sponsored Rep. Maxine Waters, D-Calif., and Rep. Walter Jones, R-N.C.
The Senate must still act on it.
The Independent Insurance Agents and Brokers of America (Big “I”) commended the House for its vote and urged the Senate to act quickly.
“The program has been expired since May 31, putting millions of consumers at risk from the economic dangers of flood right in the midst of the hurricane season and storm season in the Midwest. The expiration has also threatened to wreak havoc in both the real estate and insurance markets during a period of great economic difficulty. It is vital that the program be extended and we therefore urge the Senate to act on this bill without delay,” said Charles Symington, Big “I” senior vice president of government affairs.
The program has been unable to issue new or renewal policies since it was shut down May 31, although it is still paying claims. It is the fourth time in the past year that the program has been interrupted due to the failure of Congress to reauthorize it for an extended period.
The Big “I” and other industry groups hope that Congress will move beyond temporary extensions and pass legislation that authorizes the program for five years and makes certain reforms to it.
Read more: http://www.insurancejournal.com/news/national/2010/06/23/111009.htm#ixzz0rhwYXnlQ
Posted by Benji Riggins on June 18, 2010 under Flood |
The Senate today voted against legislation that included a provision to reauthorize the National Flood Insurance Program (NFIP).
Along with short term extensions for numerous other federal programs, the NFIP extension was passed by the House just prior to the Memorial Day recess. It was voted down by the Senate today amid concerns that other, unrelated provisions in the bill would add to the federal budget deficit. Should the Senate approve an amended version, the legislation would have to go back to the House for another vote in that chamber.
The Senate vote drew criticism from the National Association of Mutual Insurance Companies (NAMIC).
“It’s been over two weeks since the National Flood Insurance Program was allowed to expire, and the program is still being held up because of unrelated issues,” said Jimi Grande, NAMIC senior vice president of federal and political affairs. “This lack of action by Congress is unacceptable, particularly when we’re in the first few weeks of the 2010 hurricane season.”
The Atlantic storm season began June 1 and the National Oceanic and Atmospheric Administration has forecasted that 2010 will be among the most active seasons ever. The NOAA predicts that 2010 will see 14 to 23 named storms, with eight to 14 of those developing into hurricanes. Of those, the NOAA has said that three to seven may develop into Category 3 or above hurricanes with winds of over 110 miles per hour.
“We cannot afford to have political disagreements get in the way of protecting millions of Americans from flood losses,” Grande said.
Source: NAMIC
Read more: http://www.insurancejournal.com/news/national/2010/06/16/110798.htm#ixzz0rDbxnJHL
Posted by Benji Riggins on June 4, 2010 under Flood |
The National Flood Insurance Program (NFIP), which expired at midnight on May 31, is not expected to be able to issue new policies for a week or longer.
As reported by Insurance Journal last Friday, Congress left town for the Memorial Day holiday without acting on legislation to reauthorize the program and Congress is not expected to take it up again until June 7, at the earliest. Bills have been introduced in both the House and the Senate to extend the program until the end of the year, but Congress has yet to consider these measures.
The hiatus– the fourth within a year– comes at the opening of the Atlantic hurricane season, which forecasters say will be very active.
If past NFIP suspensions are any indication, it will mean frustration and delays for property owners and property buyers and insurance agents trying to serve them.
“The series of temporary extensions, last minute actions and service lapses during such a delicate period in the American economy is troubling to agents, homeowners and small businesses,” says Charles Symington, senior vice president of government affairs for the Independent Insurance Agents and Brokers, or Big “I.”
Symington said the program is meant to provide some level of stability and protection for homeowners and businesses against unpredictable flooding events, “not to be an unpredictable ‘here one minute-gone the next’ program subject to monthly congressional action.”
Insurers also lamented the lack of federal action.
“Once again, the NFIP has become a victim of politics that have nothing to do with the program itself,” said Kathy Mitchell, National Association of Mutual Insurance Companies, federal affairs director. “Allowing the NFIP to lapse just as the 2010 storm season is beginning shows a troubling lack of judgment on the part of Congress.”
Many in the insurance industry support a five-year extension of the program. Congress has traditionally extended the program for five year periods but in the past year it began extending the program only for short periods, from 30 days to six months, as the reauthorization has become tied up with controversial legislation involving unemployment benefits, tax breaks, Medicare payments to doctors and other issues unrelated to flood insurance.
“Lapses in this program cause confusion and leave many homeowners and small businesses unprotected during a very dangerous time. The Big ‘I’ is also concerned that the uncertainty of temporary extensions and the numerous lapses that have already occurred in the last few months will negatively impact the market,” said Robert Rusbuldt, president and CEO of the Big “I.”
Read more: http://www.insurancejournal.com/news/national/2010/06/01/110348.htm#ixzz0poaZpNKt
Posted by Benji Riggins on May 3, 2010 under Flood |
“Homeowners can mitigate against wind damage, but they’re powerless, really, to do anything against storm surge,” says one researcher whose job it is to develop ways to determine the vulnerability of homes and other properties not only to storm surge, but wildfires, sinkholes, earthquakes and other natural perils.
Dr. Howard Botts, vice president and director of development for First American Spatial Solutions (FASS), says a recent report and model developed by his company are able to demonstrate how destructive, both physically and financially, storm surge can be.
Storm surge is “such a large scale phenomenon that doesn’t really respect construction and other kinds of things,” Botts said. “If you’re in a storm surge zone, you’re likely to be impacted by it.”
Until Hurricane Katrina in 2005, however, the impact of storm surge on the overall property losses caused by hurricanes was generally not in the forefront of concern to most residential property insurance companies. After all, storm surge was a flood loss not covered by the traditional homeowners insurance policy.
Katrina and the lawsuits that followed changed that mindset.
Insurers, and indeed the world, saw first hand the amount of damage storm surge could produce. Just three years later, Hurricane Ike blasted ashore near Galveston, Texas, with a massive storm surge that helped it become the third most costly U.S. hurricane on record, largely due to the surge.
A member of the First American Corp. family of companies, FASS has access to information on around 90 percent of all the private properties in the United States, or at least 124 million separate addresses. The group has used that information to develop a model to analyze storm surge exposure at the individual property level.
The 2010 First American Storm Surge Report released in late March illustrates the exposure of single residential structures to storm surge in 13 key geographic areas. The numbers are massive. The storm surge exposure to Miami alone in the event of a Category 5 hurricane $53.6 billion, according to the report.
Flood Coverage or Not?
Insurance agents throughout the United States, and especially those whose customers own properties near the nation’s coastlines, are painfully aware that only a fraction of residential property owners that need the protection of flood insurance actually buy it. Even homeowners in areas that are high risk for flooding sometimes are reluctant to spend the extra money, although the coverage is far less expensive than traditional property insurance.
Botts said the information provided by the storm surge hazard model could be a useful tool for agents and insurance companies to use to educate insureds about the danger of storm surge in vulnerable coastal areas — and in informing property owners of the need to buy flood insurance.
“What we do is we build large, hazard risk data sets, tax data sets, sales and use tax, premium tax for the insurance industry. And we combine these very granular risk-hazard or tax databases with a geocoder that we developed, which takes an address and can get you right down to, literally, the rooftop,” Botts said.
What this means for insurers, and agents, is that they can visibly show owners of properties along and near the hurricane prone coastlines just what the impact of storm surge from a Cat 1 or Cat 5 hurricane, or any size storm in between, would be on a particular insured’s property.
For example, storm surge report released in March was designed “to look at 13 major residential property markets in the Gulf and Atlantic coastal region and understand, at a property-by-property level, which of these properties were in a storm surge potential area or would be exposed to storm surge,” Botts explained. Then property-by-property the dollar value of those single family homes — the buildings only, not the contents — in potentially affected areas was determined.
A Ton of Water
“Storm surge moves with the forward speed of the hurricane — typically 10–15 mph,” the report states. “One cubic yard of sea water weighs 1,728 pounds — almost a ton.”
Adding to the impact of rushing water, the trees, pieces of buildings and other debris that are typically caught up in the swirl act as a battering rams when they come into contact with a stationary object, such as another building.
Even areas that are not in direct path of a hurricane can be hugely impacted, as evidenced during Hurricane Ike, when its storm surge powered north up Galveston Bay, along the east side of Houston.
Botts says natural and man-made channels and barriers can add to the destructive possibilities.
“What’s going to facilitate inward movement? Creeks, bayous, drainage ditches,” he said, adding that un-raised highways and railroad rights-of-way can also serve that purpose. Meanwhile, natural and man-made barriers, such as hills, levees, even mounds of earth can keep the surge from flowing out of inland areas.
“We spend an enormous amount of time looking at what happens once that water gets onshore, what are the likely areas of inundation,” Botts said.
Listen to Insurance Journal’s interview with Dr. Howard Botts online at http://www.insurancejournal.tv/videos/3622/.
By Stephanie K. Jones
April 30, 2010
Posted by Benji Riggins on April 16, 2010 under Flood |
Congress Thursday voted to restore jobless benefits for hundreds of thousands of Americans who had lost them during a partisan standoff in the Senate over spending.
[The bill also reauthorizes the federal flood insurance program until the end of May and restores federal COBRA health insurance subsidies.]
The House of Representatives voted 289-112 to restore the lapsed programs and sent the measure to President Barack Obama, who signed it into law. The Senate had approved it earlier in the day after weeks of delay.
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With the unemployment rate at 9.7 percent, some 6.1 million Americans rely on jobless benefits. Those benefits, which average roughly $300 a week, expired for more than 200,000 Americans on April 5 after Republican Senator Tom Coburn blocked a vote shortly before Congress left town on a two-week break.
The standoff also has disrupted a federal flood insurance program, which has held up 1,400 home sales each day in flood-prone areas and slashed emergency loans to small businesses, Democrats said.
COBRA health insurance subsidies for the unemployed and payments to doctors under the Medicare health program have also been disrupted.
[The provision reauthorizing the federal flood insurance program is effective retroactively to Feb. 28 and extends the program until May 31, 2010, the day before the new hurricane season officially starts.
The Independent Insurance Agents & Brokers of America (Big "I") said it is concerned that Congress has only extended the program for a brief period again.
"It is alarming that the NFIP was allowed to expire, causing so much confusion and potentially leaving desperate homeowners and small businesses unprotected for more than two weeks," said Robert Rusbuldt, Big "I" president and CEO. "The Big 'I' is greatly concerned that these short expiration periods, coupled with the uncertainty of temporary extensions, will negatively impact the market."
Since the extension is retroactive, any new policy applications or renewals that were signed and submitted during the hiatus will be effective from the date of application or, in the case of waiting periods, the waiting period will start from the date of application, according to the agents' group.
"This series of temporary extensions, last minute actions and service lapses during such a delicate period in our economy is of great concern to our agents, homeowners and small businesses," said Charles Symington, Big "I" senior vice president of government affairs. "Though we are grateful that Congress extended this program, we are increasingly frustrated by these repeated one-month extensions and the periods of expiration that sometimes result from them."]
REPUBLICAN OBJECTIONS
Coburn and other Republicans argued that Congress should find a way to pay for the unemployment benefits program rather than letting it add to a budget deficit that could hit a record $1.5 trillion this fiscal year.
“Our debt and deficits are as much of an emergency as unemployment, yet Congress continues to pretend it can spend and borrow without restraint,” Coburn said in a statement.
The Senate voted down Coburn’s proposal to redirect $20 billion from other government programs.
Democrats said jobless aid had always been considered emergency spending during times of high unemployment.
Three Senate Republicans — Susan Collins and Olympia Snow of Maine and Ohio’s George Voinovich– voted for the bill. In the House, Republicans were divided, with 49 voting for the bill and 112 voting against it.
Jobless benefits normally expire after six months, but Congress has extended the program several times during a slump marked by high levels of long-term joblessness.
Obama said he was “grateful” that Congress had moved forward on the temporary extension but urged lawmakers to extend the benefits further.
“As I requested in my budget, I urge Congress to move quickly to extend these benefits through the end of this year,” Obama said in a statement.
“I also urge Congress to move forward on legislation to help small businesses grow and hire and other measures to increase the pace of job growth,” he said. “This is my top priority, and I will fight day and night until every American who wants a good job has one.
The bill passed by the Senate would extend benefits through June 2 and apply retroactively to those cut off last week. It would cost $18.2 billion, according to the nonpartisan Congressional Budget Office.
Democrats have been extending the program on a month-to-month basis as they work on a longer-term fix.
That has given Senate Republicans plenty of opportunity for disruption.
Republican objections forced the Senate to spend most of the week on a measure that had been handled on a routine basis in the House. Democrats can expect to face similar delays on other spending measures that are not offset with spending cuts elsewhere, Coburn said.
REGULAR DEBATE TOPIC
The debate over spending is likely to resurface on a regular basis as the November congressional elections approach.
Republicans have pointed to record deficits and last year’s $863 billion economic stimulus package to paint Democrats as reckless spenders unconcerned with the country’s mounting debt.
Democrats say the country’s dire fiscal situation can be traced in large part to tax cuts, wars and an expansion of Medicare that were enacted when Republicans were in control.
“Those who talk about balancing budgets who have not balanced them in the past should not be trying to do so on the backs of hundreds of thousands of unemployed in our beloved country,” said Democratic Representative Sander Levin, who chairs the tax-writing Ways and Means Committee.
(Additional reporting by Deborah Charles; Editing by Eric Walsh and Peter Cooney)
By Andy Sullivan
April 15, 2010
Posted by Benji Riggins on March 29, 2010 under Flood |
As insurance and real estate agents and homeowners feared, Congress left Washington without extending the federal flood insurance program.
Congress adjourned until April 12 after failing to agree on an unemployment benefits bill that included a provision with an extension of the National Flood Insurance Program.
As a result, the federal flood insurance program’s authority to write new policies ends on Sunday, March 28 at midnight. After that time, insurance agents will not be able to provide new or renewal flood insurance policies, which are required by lenders to close on some real estate sales.
Senator Tom Coburn, R- Okla., blocked the Senate from voting on the bill to extend the jobless benefits arguing that to do so would add to the deficit. Democrats argued that the measure qualified as emergency spending.
A similar impasse occurred at the end of February and the NFIP was closed for several days until Congress renewed it on March 2.
But this time the hiatus will be longer.
Congress could reinstate the NFIP and other affected programs retroactively when it returns on April 12.
The NFIP expiration last month caused headaches for insurance agents and their customers as well as delays for some consumers waiting to close on the sale of a property within a flood hazard area.
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.
The NFIP has issued guidance for operating during an interruption.
FEMA is expected to issue updated guidance soon.
Posted by Benji Riggins on March 5, 2010 under Flood |
The U.S. Senate last night passed legislation that includes an extension of the federal flood insurance program until March 28. President Obama has signed the measure.
The extension means that the National Flood Insurance Program (NFIP), which has been unable to issue policies since its authorization expired at midnight on Feb. 28, should be able to again start issuing new and renewal policies. NFIP issued a memo on Feb. 26 that included guidelines for operations during a hiatus. However, the agency has not yet released any follow-up guidance for insurers or agents following this reauthorization.
The several days’ hiatus did not affect NFIP claims paying. The program insures more than 5 million properties.
The emergency legislation reauthorizing funding for the flood program was part of a larger $10 billion bill dealing with unemployment insurance, subsidies for COBRA benefits, transportation projects and several other federal programs.
The legislation had been held up by Sen. Jim Bunning, R-Ky., who objected that it did not address funding. Supporters said that as emergency legislation, it was exempt from the “pay-as-you-go” law. Bunning eventually agreed to lift his hold after being permitted to offer an amendment on funding, which was defeated. The unemployment benefits legislation with the flood insurance reauthorization then passed with a bipartisan vote of 79-19.
The NFIP sunset caused delays for some consumers waiting to close on the sale of a property within a flood hazard area.
While no new policies could be issued during the lapse in authorization, consumers with current policies remained covered by the federal program, according to the National Association of Insurance Commissioners.
This short-term extension is itself an extension of a previous emergency authorization of NFIP. In December, the Senate extended it to Feb. 28.
Last Thursday, the House passed the bill addressing the expiring federal programs, but Bunning’s opposition kept the Senate from advancing the legislation before the NFIP’s Feb. 28 deadline.
Congress has been working on longer-term legislation to authorize NFIP for up to five years, which would be welcomed by the insurance industry.
“We applaud the Senate for recognizing the urgency in extending the National Flood Insurance Program,” said David Sampson, president and CEO of the Property Casualty Insurers Association of America (PCI). “This vitally important program protects over five million families across the country. The recent debate in Congress underscores the need to bring greater certainty and stability to the flood program in 2010 and advance a long-term extension that ensures the program’s fiscal soundness.”
Posted by Benji Riggins on March 1, 2010 under Flood |
The Senate last week failed to vote on bills to extend several federal programs including jobless benefits, COBRA subsidies, transportation project funding and flood insurance before these programs expired Feb. 28.
A single senator, Jim Bunning, R-Ky., has derailed final approval of the programs’ extensions over concerns about how to pay for them, especially the extension of unemployment benefits.
The result is that the programs could be in limbo for about a week while the Senate finds a way to get the job done. The National Flood Insurance Program (NFIP) will not be able to issue new policies, increase coverage, approve renewal policies or pay claims until Congress approves reauthorization.
Bunning maintains that Congress has not paid for these extensions through any new funding or cuts as is required. Bunning, who is not running for re-election, said he supports extension of the benefits and programs including flood insurance but feels funding should be clear.
“The only difference I have, and some of my good friends from the other side of the aisle, is that I believe we should pay for it. There is a right over the last three years of the Democratically controlled Congress. We have run up $5 trillion in debt. There has to be a time to stop that,” Bunning said on the Senate floor.
Senate Majority Leader Harry Reid vowed that the measures would pass sometime this week but criticized the Republican’s tactics in delaying the approval of the programs.
“We talk a lot about Senate procedure in our debates, and that’s often appropriate. But it’s also often complex,” Reid said. “The catch here is that these benefits do not need to expire. We have the ability right now to extend them for just a short time until we work out a longer-term solution. It is irresponsible not to. It is immoral.”
If approved, the current bill would only extend the NFIP for a month, until March 28. There have been several short-term extensions within the past year.
The House has already approved the bills.
Guidelines for Carriers, Agents
The Federal Emergency Management Association (FEMA), which manages the flood program, issued a bulletin on Feb. 27 with guidelines for insurers and agents participating in the program in the event of a lapse. The agency did say that “any hiatus period should be brief, and most of the nearly 5.6 million flood insurance policyholders nationwide will not be affected.”
New policies for which insurers received payment on or before midnight of Feb. 28 will be issued and will become effective after the last day of effective authorization, regardless of the policy effective dates.
The NFIP recommends that companies writing flood insurance hold any premiums, renewals or added coverage endorsements received on or after Feb. 28.
Eventual reauthorization will likely be granted retroactively, and insurers can issue policies effective as of the date they received payments, according to FEMA.
Policies with a 30-day waiting period would become effective when both the 30-day waiting period has ended and Congress has reauthorized the NFIP.
By Andrew G. Simpson
March 1, 2010
