Flood Insurance Bill Wins Approval

Originally published by the Mobile Press Register

Flood bill wins panel approval
Unlike House version, the legislation does not include wind coverage option

Thursday, October 18, 2007
By SEAN REILLYWashington Bureau

WASHINGTON -- An overhaul of the federal flood insurance program won swift approval from the Senate banking committee Wednesday but almost as quickly ran into objections from a Louisiana senator who helped derail a similar measure last year.

"It's not where it needs to be," Adam Sharp, a spokesman for U.S. Sen. Mary Landrieu, D-La., said of the bill, which passed 21-0 after just seven minutes of discussion.

The legislation, jointly sponsored by the committee's chairman Chris Dodd, D-Conn., and U.S.
Sen. Richard Shelby, R-Tuscaloosa, would write off more than $17.5 billion that the flood program owes to the federal treasury, mainly because of claims resulting from Hurricane Katrina.


In return, however, the bill would impose higher costs on some participants in hopes of shoring up the program's future finances.

Subsidized premiums, for example, would be phased out for vacation homes, businesses and some properties that suffer repeated losses.

The legislation "helps to ensure that the flood insurance program can continue to provide critical insurance coverage and puts the program on stronger financial footing," Dodd said.

Like a bill overwhelmingly approved by the House last month, the Senate measure would allow federal managers to raise unsubsidized premiums by up to 15 percent annually, in place of the 10 percent cap now in place.

Unlike the House version, it would not give policyholders the option of adding federally backed coverage for wind-storm damage.

U.S. Sen. Mel Martinez, R-Fla., had planned to pursue a wind coverage amendment at Wednesday's committee meeting but backed off after realizing he didn't have the votes. Shelby, the panel's top Republican, is adamantly opposed. Dodd, while saying the proposal has "merit," voiced unease about the possible cost.

Afterward, Martinez said he intended to offer his amendment when the bill comes before the full Senate. "I'm not holding my breath that it will be successful," he said.

The flood insurance program has more than 54,000 policies in Alabama, the bulk of them in Mobile and Baldwin counties, according to the most recent available statistics.

With Congress up against a clogged agenda for the remainder of the year, no timetable has been set for the flood insurance bill to come to the Senate floor. But Dodd's hope of whisking the measure through with no debate appeared unlikely to be fulfilled.

Under Senate procedures, a single lawmaker can bottle up a bill indefinitely. That's what happened to last year's flood insurance bill, when both Landrieu and U.S. Sen. David Vitter, R-La., kept the measure from moving forward after it received committee approval.

A Vitter spokesman did not return a phone call Wednesday, but Sharp did not rule out a similar step this time. Louisiana has more flood insurance policyholders than any other state, with many participants in properties that have flooded repeatedly.

Although he applauded the debt forgiveness provision, Sharp said the bill otherwise "has not made a lot of progress in the direction of a common ground solution that works to keep the program solvent and the premiums fair."