WASHINGTON, Jan. 4, 2013 /PRNewswire-USNewswire/ -- Congress did the right thing by voting to raise the borrowing limit of the National Flood Insurance Program (NFIP), according to the National Association of Professional Insurance Agents (PIA).
On Friday January 4, the U.S. Senate and House voted to increase the borrowing authority of the NFIP by one-third, to $30.425 billion from $20.775 billion. The bill now goes to the President for his signature.
"PIA is pleased that Congress has begun to act to assure that valid claims filed by property owners who are insured under the National Flood Insurance Program (NFIP) will continue to be paid," said PIA National assistant vice president for federal affairs Mike Becker. "The action by Congress to raise the borrowing authority of the NFIP will alleviate the immediate threat that many flood claims from Tropical Cyclone Sandy, as well as other storms, would not be paid. We appreciate that Rep. Scott Garrett (R-N.J.) took the lead to introduce a bill that would increase funding to the NFIP."
Funding for insured flood claims along with relief for the victims of Tropical Cyclone Sandy got ensnared in Washington politics when House Speaker John Boehner (R-Ohio) cancelled a scheduled vote on a Sandy aid package on January 1, minutes after the House approved a deal to avoid the so-called "fiscal cliff." That prompted cries of outrage from lawmakers from areas in the Northeast devastated by the October 29 storm, along with New York Gov. Andrew Cuomo (D) and New Jersey Gov. Chris Christie (R). Boehner quickly relented, scheduling a vote on increased NFIP borrowing authority for January 4 and a Sandy aid package for January 15.
Of the need to pay the claims of those who are insured by the NFIP, PIA National President Andrew C. Harris said, "Not paying valid claims is simply not an option. The federal government has both a legal obligation and a moral imperative to pay to indemnify policyholders for their covered flood losses in policies backed by the NFIP."
Since Sandy struck, PIA immediately began lobbying Congress for action to increase the NFIP's borrowing authority, as well as for expedited relief for the victims of the storm.
Rep. Jeb Hensarling (R-Texas), incoming chairman of the House Financial Services Committee, said during the debate that while people with flood policies need to be paid now, his committee will mark up a bill this year "to transition to a private innovative, competitive, sustainable flood-insurance market." He acknowledged that some reforms were imposed through the NFIP reauthorization legislation enacted in July, but said that despite those reforms "Sandy has hit before many of these provisions could take effect."
"PIA supports the NFIP and we remain confident that after years of work, the NFIP reform law that passed Congress last year will make the necessary changes to put this program back on a sound footing, " Becker said. "We caution against proposals that would privatize the NFIP before the reforms are even implemented, and we look forward to conversations with the Chairman on his ideas to strengthen the program."
Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America SM. PIA's web address is www.pianet.com.
SOURCE National Association of Professional Insurance Agents