WASHINGTON—In response to the devastating aftermath of Hurricane Harvey, House Financial Services Committee Chairman Jeb Hensarling (R-TX), is set to propose a three-month extension to the National Flood Insurance Program (NFIP) before it expires at the end of the month.
Previous legislation aimed for a five-year renewal, but this new plan, acknowledging Congress' busy calendar for the next few months, would increase the NFIP's borrowing authority to pay claims resulting from Harvey's damage while continuing to promote private companies' involvement in the market, NAFCU reported.
NAFCU said it supports long-term authorization for the program, but is concerned about measures that would drastically increase privatization and make it more difficult — and expensive — for homeowners to obtain flood insurance coverage.
In June, NAFCU Vice President of Legislative Affairs Brad Thaler outlined proposed improvements to the NFIP that NAFCU and its members were supportive of, including:
- Transparency of NFIP premium rates and methodologies
- Increasing coverage limits for both property and structures
- Capping annual risk premiums at $10,000
- Decreasing annual rate increase caps to 15%
- Addressing the need for improved technology and expediency of mapping efforts
- Taking steps to maintain the financial solvency of the program and market sustainability
The NFIP currently owes more than $24 billion to the U.S. Treasury and has a $30-billion borrowing limit, which likely will be reached because of Harvey, NAFCU noted.