| WASHINGTON, Sept 23
WASHINGTON, Sept 23 The U.S. House of
Representatives voted on Thursday to extend for a year a
troubled program that insures more than 5.5 million homes and
businesses against floods, sending the measure to President
Barack Obama, who is expected to sign it into law.
The National Flood Insurance Program has been deeply in
debt since the costly hurricanes of 2004 and 2005. Repeated
efforts in Congress to overhaul it have failed.
But Democratic and Republican lawmakers told Reuters this
week they expect to try again next year to craft reforms.
"The flood program definitely needs work," Representative
Spencer Bachus, top Republican on the House Financial Services
Committee, said on Thursday at the Reuters Washington Summit,
Floods are the most common natural disasters to occur in
the United States. Standard homeowners insurance does not cover
flooding and must be purchased through the NFIP.
Big insurers with a stake in the flood insurance debate
include Allstate (ALL.N), Travelers (TRV.N), Hartford Financial
Services (HIG.N) and Fidelity National Financial (FNF.N).
The program is administered by the Federal Emergency
Management Agency and provides flood coverage through more than
90 companies that sell policies and collect premiums on the
government's behalf for a fee. The premiums go to FEMA.
"A one year extension gives Congress the time necessary to
debate the more fundamental reforms the program needs. But,
between now and then, homeowners living in flood-prone areas
will have the stability, protection and peace of mind to go on
with their lives," said Blain Rethmeier, a spokesman for the
American Insurance Association, an industry group.
Reform legislation stalled in Congress last year in a fight
over adding wind damage coverage to the program. The House
wanted to add it, but the Senate did not.
Since 2008, the program has functioned under a series of
short-term extensions. This year, Congress has let the program
lapse four times, meaning new flood insurance policies could
not be written and complicating thousands of real estate
transactions daily in flood-prone regions, according to the
Property Casualty Insurers Association of America.
"Today's vote in the House will help ensure that the NFIP
will be there for the final two months of this year's hurricane
season and much of next year's as well," said Jimi Grande, a
senior vice president at the National Association of Mutual
Insurance Companies, another industry group.
"It will not, however, fix the problems with the NFIP
itself. The program is financially unsustainable and failing to
address that only makes the problem worse for homeowners,
insurers and the American taxpayers," Grande said.
"We at NAMIC urge members of Congress to use these next 12
months to fix this vital program, which protects millions of
homes and businesses across America."
(Reporting by Kevin Drawbaugh; Editing by Dan Grebler)