The National Flood Insurance Program (“NFIP”) expired on May 31, 2010 and, for the third time this year, the NFIP lapsed for a month. On July 1, 2010 the NFIP was reauthorized retroactive to June 1, 2010 and this reauthorization will expire on September 30, 2010.
During the month lapse, the NFIP was not in operation and did not issue new and renewal policies and did not increase coverage amounts on existing policies. Any new policy applications or renewals that were signed and submitted during the lapse, however, will be effective from the date of application.
Industry groups were pleased with the reauthorization of the NFIP, but continue to believe that long-term reforms are necessary. Robert Rusbuldt, President and CEO of the Independent Insurance Agents & Brokers of America (“Big I”) , stated: “While the Big I is appreciative of Congress extending the program on a temporary basis, we are also greatly concerned that these short expiration periods and patchwork of temporary extensions will negatively impact the market.” HR 5114, sponsored by Rep. Maxine Waters, D-Calif., is awaiting action by the House and would reauthorize the NFIP for five years.