A recent op-ed in the Washington Post recently describes yet another delay in efforts to reform the National Flood Insurance Program (NFIP). In brief, Congress passed the Biggert-Waters Act in 2012, which sought to remedy numerous problems in NFIP, including a five-year phase-out of flood insurance premium subsidies. Two weeks ago, the Senate approved a plan (H.R. 3370) to delay the subsidy reductions. This bill, known as the “Homeowner Flood Insurance Affordability Act of 2014” will, in effect, terminate the small, first-steps that Biggert-Waters took toward eliminating (or at least mitigate) the moral hazard I described in my previous post. The bill originated in the House, but was amended in the Senate, which means it will now go back to the House for a new vote, and perhaps, further amendment. Several Representatives have expressed concern about any delays in the subsidy rollbacks. In my next post on NFIP, I’ll talk more length about Biggert-Waters, NFIP reform, and interest-group attacks on reform.
In the meantime, I would refer interested readers to the Washington Post op-ed cited above and this post at the online Insurance Journal. The official summary of the bill is available at congress.gov.