Insurance, Housing and Community Opportunity Subcommittee Chairman Judy Biggert announced the Subcommittee will convene a hearing on legislative proposals to reform the National Flood Insurance Program (NFIP). The hearing will take place on Friday, March 11th at 10 a.m. in room 2128 Rayburn.
Subcommittee Chairman Biggert said, "For many years, the NFIP has been -- for lack of a better phrase -- under water. Due to inadequate management and insufficient funds, the NFIP borrowed billions from taxpayers following the 2005 Gulf Coast hurricanes and continues to be financially unstable. Since 2006, the NFIP has been cited by the Government Accountability Office as high-risk. It's crucial that we begin to restore the financial integrity of NFIP so that homeowners and businesses in flood-prone areas, like many in Illinois, are not left without any protection and taxpayers are not on the hook for the failings of NFIP. According to the Illinois Department of Natural Resources, with more than 250,000 buildings in floodplains, nearly 15% of Illinois' land is subject to flooding. Allowing this program to lapse or to expire in September without significant reform would put millions of homeowners and businesses in Illinois and across the country in jeopardy. At the hearing, we will bring together regulators, insurers, and industry experts to examine long-term strategies for a flood insurance program that our families and local communities can count on."
Financial Services Committee Chairman Spencer Bachus said, "Thousands of communities and millions of property owners depend on flood insurance to provide some measure of security. To protect them while minimizing the risk to taxpayers, the NFIP must be made more self-sufficient."
The NFIP currently operates with $17.75 billion in debt. The NFIP, last reformed in 2004, has failed to charge sufficient rates to cover its risk which has resulted in significant exposure to taxpayers. The Subcommittee will review a discussion draft proposal that provides for a long-term reauthorization and important reforms to the NFIP that would improve its financial stability, reduce the burden on taxpayers, and examine ways to increase private market participation.