BIG “I” COMMENDS CONGRESS FOR INCREASING FLOOD BORROWING AUTHORITY
Increase needed to service consumers after active hurricane season
WASHINGTON, D.C., March 20, 2006—The Independent Insurance Agents & Brokers of America (the Big “I”) applauds Senate approval of legislation which would extend the borrowing authority of the National Flood Insurance Program (NFIP) to $20.775 billion. The Big “I” has advocated actively for the increase, which became necessary after the active 2005 hurricane season.
The Federal Emergency Management Agency (FEMA) distributed a memo to Write-Your-Own companies Nov. 11 informing them that lines of credit were suspended until further Congressional action regarding an extension of borrowing authority. With claims expected to exceed $23 billion, extended borrowing authority was necessary in order to meet consumer needs. Congress subsequently acted accordingly, increasing the borrowing authority to $18.5 billion on November 18th. The latest increase was necessitated because of the continued rise in expected claims.
“We are very pleased that the Senate has taken action,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs and federal relations. “The hurricane season absolutely overwhelmed the existing resources, which made this action necessary. This bill will help insurance buyers get the service they need and have a right to expect. We thank Congress for moving forward and getting this done for consumers who need and deserve assistance.”
The initial borrowing limit of $1.5 billion from the U.S. Treasury was extended by Congress in the immediate wake of Hurricanes Katrina and Rita, but even this extension was inadequate to meet the anticipated claims.
The Big “I” has actively supported needed reforms to the flood insurance system, including the extension of the borrowing authority and many other proposed changes. It released a comprehensive, 22-point flood modernization agenda in November, 2005. (Click here to see the Nov. 11, 2005, release.) Chief among these are the addition of optional business interruption coverage on commercial policies, increases in the maximum coverage limits, and the inclusion of additional living expenses coverage for residential policies.
A number of the Big “I”-proposed reforms have been included in H.R. 4973, Flood Insurance Reform and Modernization (FIRM) Act of 2006, passed by the House Financial Services Committee last week and sponsored by Subcommittee Chairman Richard Baker (R-La.) and Ranking Member Barney Frank (D-Mass).
Founded in 1896, IIABA (the Big “I”) is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.
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