BREAK IN TRANSCRIPT
Mr. JOHNSON of Illinois. I thank the distinguished sponsor and would preface my comments by saying I am strongly in support of Congresswoman Biggert's superb piece of legislation.
However, I rise today in opposition to this amendment offered by Representative Sherman. I would like to point out first that I fully understand and support the goal of encouraging private sector involvement and exploring ways to diminish unnecessary reliance on government programs. However, I am not convinced, in fact I am unconvinced, this amendment gets us any closer to achieving that goal. In fact, this amendment may put Congress in the position of choosing winners and losers in the marketplace, interfering with private contracts, and creating millions of dollars in new Federal spending.
I would like to make the following points: regardless of whether a flood insurance policy is provided through NFIP Direct or WIO, the Federal Government's responsible for all the losses incurred under the policy. FEMA has informed Congress that private contractors handling NFIP Direct policies can manage the recently transferred policies for $50 million less, which is a saving of $250 million over the life of the bill. I don't have to tell any individuals in today's world what that means.
Redistribution of these policies destroys, in my judgment, consumer choice, dictates to consumers the company and agent they are required to use for flood insurance, while taking property from the agents who produce the business. This redistribution affects flood insurance policyholders and insurance agents in every district in the country.
Really, the only thing this amendment does is the forcible transfer of policies from one group to the other with not only no cost savings, with significant costs to the Federal Government. A lot of questions to answer.
I believe the committee and Representative Biggert took the right approach in requesting a study before acting on the issue. Unfortunately, today, we seem to be acting contrary-wise before we have these answers. With all due respect again to the sponsor of the amendment, and certainly in concert with the sponsor of the bill, I urge a ``no'' vote on this amendment.
BREAK IN TRANSCRIPT