Insurance industry infighting may delay Congressional action on National Flood Insurance Program

Flood Insurance NewsA fight amongst lobbying groups could put a hold on Congress’ decision regarding the ailing National Flood Insurance Program. The program, which provides millions with access to affordable flood insurance, has been wracked with crippling debt for several years and has finally run out of money and reached a point where it could no longer be sustained. Last month, lawmakers allotted more money to the program in an effort to ensure its survival for another five years, but the plan failed when confronted by the program’s enormous debt.

Lawmakers were faced with a September 30 deadline to decide the fate of the program. The deadline was pushed back, however, when President Obama signed an emergency spending bill into law, which affording the program enough money to continue functioning until October 4. A similar bill is currently before the House of Representatives that will finance the program until November 18. This bill, however, has caused some problems with the nation’s property insurance industry.

State Farm is currently lobbying for a number of changes to be made to the legislation. These changes run contrary to those sought by the Property Casualty Insurers Association of America. The resulting infighting has put a hold on the bill as both groups are unwilling to compromise. One of the primary issues of contention is the fate of some 800,000 former State Farm insurance policies left behind when the insurer pulled out of the market. Competitors want access to these policies, which are currently being administrated by FEMA, but State Farm wants to ensure that the federal government retains the policies.

The battle between the nation’s insurers may postpone Congress’ action for the rest of the month.

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