US Senate backs flood insurance program extension
WASHINGTON, Sept 27 (Reuters) - The Senate gave final congressional approval on Saturday to legislation to extend the troubled U.S. flood insurance program until March 6, 2009.
Passed by the House of Representatives on Tuesday, the measure, which requires the approval of President George W. Bush, would give lawmakers time to try to resolve disagreements over reforming the debt-burdened program.
The short-term extension would prevent the National Flood Insurance Program from expiring as scheduled on Tuesday. Expiration could further unsettle fragile U.S. housing markets by preventing mortgages in need of flood coverage from closing while the program is in limbo.
"While we would have preferred that Congress pass a long-term extension with much-needed reforms, it was vital to ensure that the NFIP would not lapse on September 30," said David Sampson, president of the Property Casualty Insurers Association of America, an industry group.
With Texas recovering from Hurricane Ike and the Midwest from heavy flooding, Massachusetts Democratic Rep. Barney Frank introduced the temporary extension bill.
Congress has been unable to agree for months on whether to add wind damage coverage to the 40-year-old NFIP -- which insures millions of American homeowners in flood-prone areas -- and on whether to forgive its $18 billion debt.
The program has been swimming in red ink since Hurricane Katrina slammed into the Gulf Coast in 2005. The devastating hurricanes of that year and 2004 revealed deep problems in the program, but efforts to fix it have been unsuccessful.
The Senate voted in May to extend the program until 2013 and forgive its debt. The House also has voted to extend the program, but added a controversial wind damage coverage clause to its bill and refused to forgive the debt.
Big insurers with a stake in the issue include Allstate Corp (ALL.N), Nationwide Financial Services Inc NFS.N, Fidelity National Financial Inc (FNF.N), Travelers Cos Inc (TRV.N) and Hartford Financial Services Group Inc (HIG.N). (Reporting by Kevin Drawbaugh; Editing by Peter Cooney)
