Capitol Hill Briefing on the National Flood Insurance Program

Eyes are on Congress to settle disagreements surrounding the National Flood Insurance Program (NFIP) before the September 30 renewal deadline. To frame the conversation on the different issues surrounding NFIP reauthorization, representatives of the American Academy of Actuaries’ Flood Insurance Work Group came to Capitol Hill last Monday to give a briefing on findings from their recently released monograph, The National Flood Insurance Program: Challenges and Solutions.

While the House Financial Services Committee has been considering a package of seven bills related to NFIP reauthorization, there are still a number of details to iron out before Congress can pass it, including how long the reauthorization should last, how the market should balance the coexistence of NFIP and private insurance providers, how current subsidies should change, how to tackle the program’s $24.6 billion of debt, and how the program should account for rising sea levels.

If Congress keeps allowing the clock to tick on this deadline, it may start affecting the housing market in high-risk flooding areas as early as this summer. The uncertainty of whether or not the program will be reinstated will cause delays in home sales and purchases. If the legislation is allowed to expire, the potential effect could be significant – the National Association of Realtors estimate 1,300 home sales could be lost or delayed each day the program is not reestablished.

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