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-- WITH PHOTO -- TO BUSINESS, AND NATIONAL EDITORS:
NAMIC: Washington 'Overreacts' with Flood Insurance Bill
WASHINGTON, March 4, 2014 /PRNewswire-USNewswire/ -- In approving
legislation to undo much-needed reforms to the National Flood
Insurance Program adopted less than two years ago, the U.S. House of
Representatives has overreacted to a problem facing less than
one-tenth of one percent of American homeowners, according to the
National Association of Mutual Insurance Companies.
"Resolving those few cases where rate increases far exceeded what was
anticipated by the 2012 reforms to the National Flood Insurance
Program quickly became a choice on Capitol Hill between good policy
and good politics, and unfortunately, but not surprising in an
election year, politics won the day," said Charles Chamness,
president and CEO of NAMIC. "With today's vote, the House joins the
Senate in stepping away from much-needed reforms that would make the
NFIP sustainable for future generations, and instead chose to provide
cheap flood insurance coverage to small minority of properties at the
expense of everyone else."
The Biggert-Waters Act passed both chambers of Congress in 2012 with
overwhelming bipartisan majorities. By moving flood insurance rates
toward levels that reflect the actual risk of flooding facing a
property, the reform law would have helped make the government program
sustainable for future generations.
Jimi Grande, senior vice president of federal affairs at NAMIC, said
the repeal of the reforms could actually make future flood claims more
likely, and losses more severe. "Those with subsidized rates lose any
incentive to protect themselves from flood damage," he said, "and in
the meantime until the program's reserves reach adequate levels, the
taxpayer will still be on the hook to make sure the NFIP can pay
claims after major storms."
Grande also said that the legislation would severely impede efforts to
lure private-sector companies into the marketplace for flood
insurance.
"Unlike the government, a private insurance company has to charge
adequate rates to stay in business," he said. "No insurance company
can compete with the low rates being offered by Congress, or ask their
other policyholders to make up the loss. With today's vote, the House
continues to make the name 'National Flood Insurance Program' into a
misnomer."
NAMIC is the largest property/casualty insurance trade association in
the country, serving regional and local mutual insurance companies as
well as many of the country's largest national insurers. Our 1,400
member companies serve more than 135 million auto, home and business
policyholders.
Matt Brady Director, Federal Public Affairs mbrady@namic.org
202.580.6742
Logo - http://photos.prnewswire.com/prnh/20140110/MM44408LOGO
SOURCE National Association of Mutual Insurance Companies
-0- 03/05/2014
/Photo: http://photos.prnewswire.com/prnh/20140110/MM44408LOGO
/Web Site: http://www.NAMIC.org
CO: National Association of Mutual Insurance Companies
ST: District of Columbia
IN: FIN INS
SU: AVO LEG
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0000 03/05/2014 00:29:00 EDT http://www.prnewswire.com
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