Does this bill provide necessary financial restructuring to ensure the National Flood Insurance Program survives?
Bill Summary
This bill aims to improve the financial stability of the National Flood Insurance Program (NFIP) by enhancing the development of more accurate estimates of flood risk through new technologies, increasing the role of private markets in the management of flood insurance risks, and providing for alternative methods to insure against flood peril. Sponsor: Rep. Duffy, Sean P. [R-WI-7]
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Opponents say
• Although eliminating the Federal Emergency Management Agency’s ability to offer flood insurance coverage for developments in certain areas is supposed to create a more conscientious developer, community, or buyer, whether this will actually happen is less clear -- there’s a lot of pressure in communities to continue to develop in risky areas.
• This bill does not go far enough to cut spending. NFIP is expected to produce a shortfall of $1.4 billion in one-year's time, so $187 million over the course of nine years is negligible.
• Involving the private insurance market on flood insurance requires careful planning, and under this bill, “would expose consumers to unfair insurance practices and expose taxpayers to risk”. A move such as this one needs to be accompanied by robust consumer protections.
• This bill does not go far enough to cut spending. NFIP is expected to produce a shortfall of $1.4 billion in one-year's time, so $187 million over the course of nine years is negligible.
• Involving the private insurance market on flood insurance requires careful planning, and under this bill, “would expose consumers to unfair insurance practices and expose taxpayers to risk”. A move such as this one needs to be accompanied by robust consumer protections.
Proponents say
• Eliminating the Federal Emergency Management Agency’s ability to offer flood insurance coverage for new structures added in flood hazard zones forces communities, developers, and buyers to think harder about where they locate, since private insurance is costlier than NFIP in risky areas.
• The Congressional Budget Office finds this bill will reduce direct spending by $187 million over the 2018-2027 period; the NFIP’s financial status needs to be improved in order to stay alive, so this is a step in that direction.]
• The Congressional Budget Office finds this bill will reduce direct spending by $187 million over the 2018-2027 period; the NFIP’s financial status needs to be improved in order to stay alive, so this is a step in that direction.]
- Summary of Key Provisions of Flood Insurance Reform: 21st Century Flood Reform
- Congressman Sean Duffy’s Statement on NFIP Discussion Draft
- House NFIP reform legislation holds promise and pitfalls
- Current program extremely financially unstable
- Affordability in question: The National Flood Insurance Program needs $1.4 billion more to function
- Congressional Budget Office Cost Estimate: H.R. 2874: 21st Century Flood Reform Act
- CFA Opposes H.R. 2874, the 21st Century Flood Reform Act
