The National Flood Insurance Program (NFIP) has been officially extended to May 31st of this year. President Trump signed it into law a few days before Christmas. There is — as always with the NFIP these days — an asterisk.
Sales of flood insurance may be limited because of the shutdown of the federal government. The “may” also comes with a second asterisk. Some — like Sen. John Kennedy of Louisiana who sponsored the extension — think the program will not be impacted.
The Louisiana Republican may be right which takes us back to the first asterisk. In previous shutdowns payment of claims continued to be paid but the sale of new and renewed policies stopped. At first the Federal Emergency Management Agency (FEMA) said insurers and agents could not sell or renew policies.
Then PIA National, the Property Casualty Insurers Association of America (PCI), the American Insurance Association (AIA), the National Association of Mutual Insurance Companies (NAMIC) and other associations representing insurance agents and business groups and some members of Congress protested.
In a joint statement, the groups said, “The decision to stop issuing and renewing NFIP polices for the time being is a rebuke of the clear intent of Congress and the President. The inability of FEMA to act as directed by our elected officials is disappointing,” the joint statement said.
The protests resulted in a change of mind.
So at the time we write this, the FEMA has stated insurers can resume the sale, renewal, and monetary endorsements for flood insurance policies.
PIA National vice president of government relations Jon Gentile said the association is pleased with the extension and FEMA’s decision to continue flood insurance sales but is still hopeful that much-needed reform of the NFIP will come in the near future.
“An extension to May 31 will allow members of the incoming 116th Congress time to find a way to agree on reforms to the program and to pass a long-term reauthorization,” he said.
Source links: Insurance Journal, PIA National link 1, link 2