The National Flood Insurance Program (NFIP) may soon receive much needed reform as the U.S. House Financial Services Committee passes a new bill that will extend the life of the program by another five years. The Flood Insurance Reform Act, as it is known, will institute a number of improvements to what is considered an archaic program.
The bill has rallied the support of many insurance companies across the country, including the American Insurance Association (AIA).
Currently, NFIP is more than $17 billion in debt. More than 5.6 million properties are covered through the program, all of which will no longer have coverage if the program is allowed to expire on September 30th of this year. The program has had a turbulent pass with extension as Congress has never fully committed itself to long-term action.
“Given the current flooding taking place on the Mississippi River, it is especially critical to get a long-term extension of the program in place so that residents in flood-prone areas can have stability,” says Leigh Ann Pusey, CEO of the AIA.
The bill, sponsored by Representative Judy Bigger of Illinois, will reduce subsidies and increase the program’s capacity as well as a number of other improvements. One of the primary goals of the reform bill is to ensure that NFIP is on sound financial footing. So far, the bill has gotten unanimous support from the Financial Services Committee. It is likely to continue to Congress uninhibited.