Banking and Finance Law Daily Wrap Up, FLOOD INSURANCE—Waters urges Congress to ‘get serious’ about the National Flood Insurance Program, (Sep 20, 2017)
In the wake of Hurricanes Harvey and Irma, and as Hurricane Maria threatens Puerto Rico, Rep. Maxine Waters (D-Calif) is renewing her call for Congress to forgive the National Flood Insurance Program’s current $24.6 billion debt. In her statement, Waters also urged Congress to raise the NFIP’s borrowing authority so that it may pay all flood insurance claims from Hurricanes Harvey and Irma.
According to Waters, prior to Hurricane Katrina in 2005, the NFIP had been self-supporting for most of its nearly 50-year history. However, following Hurricanes Katrina, Rita, and Wilma in 2005, the NFIP was forced to borrow $19 billion that it could not repay. In 2012, Congress authorized an additional $7 billion, bringing the NFIP’s total authority to $30.425 billion, to cover claims arising from Superstorm Sandy.
Prior to Hurricane Harvey, NFIP’s debt stood at $24.6 billion, leaving only $5.8 billion to pay. Waters said the funds are expected to be exhausted following Hurricane Harvey, requiring Congress to increase the borrowing authority in order for the NFIP to pay all of its claims.
As a result, Waters urged Congress to wipe the NFIP’s slate clean, replace the current structure with a mechanism to exclude the most catastrophic risk from premium rates, and set aside funds to pay for those additional costs.
"As a nation, we must get serious about the reality that climate change will likely make these storms more frequent, stronger and more devastating than ever before," said Waters. "And we must make sure that the National Flood Insurance Program (NFIP) remains available and affordable to all Americans."
LegislativeActivity: FloodInsurance