Representative Biggert (R-IL) is set to unveil draft legislation to overhaul the U.S. National Flood Insurance Program (the "NFIP"). The NFIP provides coverage to over 5 million homes for flood damage. It is sold through more than 90 companies that collect premiums on behalf of the Federal Emergency Management Agency ("FEMA") for a fee. The premiums go to FEMA and are used to pay for claims.
According to media reports, Biggert's draft will contain ways to defray the taxpayer burden the NFIP's current structure creates every time the U.S. experiences a rash of floods. The draft will contain, among other proposals, language to allow the NFIP to be privatized or to purchase reinsurance. Biggert's draft will also exclude coverage for wind damage.
Over the past few years, the NFIP has been extended by a series of short term extensions, last discussed here. We will continue to monitor Representative Biggert’s draft as it works its way through Congress.