The United States House of Representatives voted to pass 21st Century Flood Reform Act by a margin of 237 to 189. This Reform Act is a package of seven different bills that reauthorizes the National Flood Insurance Program (NFIP) until 2022.
It’s important to remember that the way the U.S. government systems operates means that the House passing this reform does not mean that these changes will become law. For that to happen the Senate must also pass the reform. Now that the act is with the Senate, the governing body has three options. One, they pass the act as is and make it law. Two, they can introduce their own version of the bill and send it back to the House. Or, three they can do nothing and let the reform die. If they choose to do nothing the NFIP will expire on December 8th.
Unfortunately, the House measure is rather partisan in its support. As the primary drivers behind the measure, the GOP is all for it. House Financial Services Committee Chairman Jeb Hensarling (R-Tex) said of the bill There are a lot of good reforms in this bill for both taxpayers and ratepayers. It is an absolutely revolutionary reform that we can break open the government monopoly and bring in market competition, innovation, more affordable rates for so many.”.
Conversely, Rep. Maxine Waters, (D-Calif.), ranking member of the House Financial Services Committee said that she was happy to see the bipartisan effort behind the creation of the bill, but withheld supporting it due to the impact it is set to have on lower to middle-class Americans.
“This bill will punish lower- and middle-class Americans with increased premiums, surcharges, and reserve fund assessments. In the wake of a historic hurricane season that devastated so many communities, it is unconscionable that we are considering a bill that would make flood insurance less affordable. We should be focusing on providing additional disaster relief and recovery after these devastating storms, not punishing these communities with higher premiums and surcharges,” Waters said.
With the NFIP set to expire on December 8th, we won’t have long to wait to see what the Senate decides to do. For those involved in the insurance market, or living in areas at risk of flooding, this is certainly a story worth watching.