NAMIC: Washington 'Overreacts' with Flood Insurance Bill



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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

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0000 03/05/2014 00:29:00 EDT http://www.prnewswire.com

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