Congressional Committee Holds Hearing on NFIP

The federal Financial Services Committee met Wednesday, June 7, 2017, to discuss the National Flood Insurance Program (NFIP) in a hearing titled, “Flood Insurance Reform: A Taxpayer’s Perspective.”

The program is set to expire on September 30, 2017, and the legislature currently has six house resolutions on the table to reform the NFIP. If passed, these measures would improve flood premium affordability, open the market to private insurers, address insurance fraud, and allow local mapping of flood-prone areas as an alternative to NFIP maps.

Congressman Jeb Hensarling, Committee Chairman, stated that the NFIP runs an annual actuarial deficit of $1.4 billion, and faces a total debt of $24.6 billion. In addition, 2 percent of all policies account for 25 percent of all claims under the program.

Ranking Member Maxine Waters noted that Congress cannot allow the program to lapse, but that it should take measures, such as addressing cost, allowing a long-term reauthorization, and putting policyholders first, to ensure the NFIP’s success.

Five individuals participated in a panel to address concerns and questions posed by the committee. Those testifying had differing opinions on how best to improve the NFIP, but most agreed that providing more affordable flood premium rates and expanding to the private insurance sector would benefit policyholders.

The NFIP must be reauthorized by Congress this session to remain operational, but no legislation has yet made it to the floor of the House of Representatives.