Insurers try to stay above water at US conventions
DENVER, Aug 26 (Reuters) - Insurance industry lobbyists worked this week at the Democratic convention to keep the U.S. government's troubled flood insurance program from getting swept away by election-year politics.
Congress never got around to finishing work on renewing and reforming the 40-year-old program, which insures millions of U.S. homeowners in flood-prone areas.
Now, with the conventions under way and politicians hot on the campaign trail, the program is set to expire on Sept. 30, unless lawmakers can refocus and quickly work out their differences next month back in Washington.
Expiration of the program could rattle the already shaky housing market, said David Sampson, president of the Property Casualty Insurers Association of America, an industry group.
"Any federally backed mortgage (needing flood insurance) would be held in abeyance and couldn't close during that period of time when the program is in limbo," Sampson said.
"Given the precarious nature of the housing market right now, we don't need any additional disruptions," he said outside the convention, where hordes of lobbyists are working the halls and reception rooms seeking the attention of lawmakers.
The National Flood Insurance Program (NFIP) has been $18 billion in debt since Hurricane Katrina slammed into the U.S. Gulf Coast in 2005 with high winds and a massive flood surge.
The devastating hurricanes of 2004-2005 revealed severe problems with the NFIP, but efforts to fix it have only led to disagreement, which extends to the presidential campaigns.
Illinois Sen. Barack Obama, the Democratic candidate, favors setting up a national catastrophic insurance fund -- a much broader reform than extending the NFIP.
Arizona Sen. John McCain, the Republican contender, and the Bush administration oppose a catastrophe fund.
In November, the House defied a Bush veto threat and approved a bill to create a National Catastrophe Risk Consortium for state disaster insurance funds.
The bill never cleared the Senate, which has called for setting up a commission to study the matter.
Obama supporters met earlier this week with local leaders in Clearwater, Florida, "to get their input on Florida's growing property insurance problem," the campaign said.
MORE DEBT FEARED
Any final action on a catastrophe fund is unlikely in the near term, but letting the existing flood insurance program expire next month could pile even more debt onto it, lobbyists said. Continued...
