MAY 24 — The Heartland Institute’s Center on Finance, Insurance, and Real Estate today applauded the announcement from Senate Majority Leader Harry Reid (D-NV) to move forward with a vote next month on a package of reforms to the long-troubled National Flood Insurance Program.
Reid announced the U.S. Senate would approve a 60-day extension of the program, which currently is scheduled to expire May 31, in order to give the chamber time to consider a five-year reauthorization bill that was approved by the Senate Banking Committee in September 2011. The U.S. House of Representatives approved a substantially similar bill in July 2011.
Under both the House and Senate bills, subsidized flood insurance premium rates would be phased out for all severe repetitive loss properties, second homes and vacation homes, commercial properties, and any property that has suffered damage exceeding 50 percent of its fair market value or that has undergone improvements of more than 30 percent of its fair market value. The bills also would require the NFIP to begin building a reserve fund for catastrophic flooding, and would permit the Federal Emergency Management Agency to purchase private reinsurance or issue catastrophe bonds to better secure the program’s finances.
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“The National Flood Insurance Program is $17.8 billion in debt and, as currently constructed, is unlikely ever to repay that debt. Despite strong bipartisan support, proposals to reform the program have been stalled in Congress for the better part of the last decade. Sen. Reid’s announcement that reform legislation will finally receive a vote is very welcome news for taxpayers and for the environment.”
Deputy Director, Center on Finance, Insurance and Real Estate
The Heartland Institute
The Heartland Institute is a 28-year-old national nonprofit organization headquartered in Chicago, Illinois. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.