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NAMIC Opposes Amendment to Kill Flood Insurance Program

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Posted on 12 Jul 2011

Efforts to eliminate the National Flood Insurance Program would put millions of homeowners at risk and cost the American Taxpayers billions of dollars, according to the National Association of Mutual Insurance Companies (NAMIC).

“Eliminating the National Flood Insurance Program is the worst policy option out there,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “The NFIP, while not without its flaws, is the only mechanism we have to ensure that those facing a flood risk are helping to cover the costs of flooding. If you take that away, you’re putting more of the expense of any major flood on the shoulders of the taxpayers.”

An amendment filed by Rep. Candice Miller, (R-MI) to HR 1309, the Flood Insurance Reform Act of 2011, calls for the program to be shut down as of January 2012 and would instead allow states to form regional insurance compacts to spread risk. It would continue to allow the Federal Emergency Management Agency to assist in their efforts in producing flood maps, as well as assist states and the private sector to insure against flood loss.

“Terminating the NFIP is not responsible public policy,” Grande said. “The unique nature of flood risk makes it virtually impossible for private insurers to be able to offer a viable and affordable insurance product. That is why Congress created the NFIP in the first place. Replacing the federal program with regional programs will exacerbate the problems posed by adverse selection and concentration of risk. Ending the NFIP means that millions of home and business owners who need coverage won’t be able to get it, and that FEMA will be spending billions more of taxpayer dollars for flood recovery.”

The House is scheduled to begin debate on HR 1309 on Tuesday, and NAMIC strongly supports the legislation. Introduced by Rep. Judy Biggert (R-IL), HR 1309 would move the NFIP towards fiscal stability by allowing for more risk-based pricing of coverage, modernizing flood maps to more accurately determine which properties are at risk, and giving the NFIP the authority to deny coverage for repetitive loss properties whose owners refuse mitigation assistance.

“HR 1309 would enact exactly the sort of reform the NFIP needs to better serve the American people, which is why it passed out of committee unopposed,” Grande said. “Rep. Miller’s amendment, if adopted, would be a disaster for all involv


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