Sen. Dodd urges U.S. Senate flood insurance action

By Kevin Drawbaugh

WASHINGTON (Reuters) - U.S. Sen. Christopher Dodd said on Wednesday he is determined to move federal flood insurance legislation through the Senate promptly, despite resistance from Louisiana lawmakers.

"I intend to do all I can to move this legislation to the president's desk as soon as possible," said the Connecticut Democrat, a former presidential candidate who outlined his 2008 priorities at a press conference.

Dodd chairs the Senate Banking Committee, which in October voted unanimously to reform federal flood insurance while refusing to follow the lead of a House of Representatives bill that would expand the program to cover wind damage.

Louisiana's senators Mary Landrieu, a Democrat, and David Vitter, a Republican, have placed holds on the Senate bill, blocking it from reaching the Senate floor for final action.

The House voted in September to overhaul the almost 40-year-old National Flood Insurance Program, which was badly crippled by heavy hurricane damage claims in 2005.

The House bill would expand the program to cover wind damage, a response by lawmakers to coverage disputes among some Gulf Coast homeowners and insurers over whether water or wind caused severe damages to many homes in Hurricane Katrina.

Insurers have lobbied hard to block a wind expansion. The Bush administration has pledged to veto the House bill.

Major insurers such as Allstate Corp and Travelers Companies are closely monitoring Congress' actions.

Congress set up the flood program in 1968 to provide flood insurance that private companies would not offer. Under the program, administered by the Federal Emergency Management Agency (FEMA), more than 90 companies get government fees to sell flood policies. About 5.4 million policies are in force.

The program requires adoption of certain land use and flood mitigation policies by communities that want flood policies to be available to their residents.

In related news, the House is scheduled to vote on Thursday on a bill that would begin to eliminate flood insurance subsidies for some flood-zone residences.

The bill would apply to recently purchased primary homes built before the end of 1974 and worth $600,000 or more and allow flood insurance premium rates to rise to market levels.

(Reporting by Kevin Drawbaugh; Editing by Brian Moss)