Bush seals deal on flood bill
January 14, 2003
National flood insurance program back in motion
Inman News Features
The Federal Emergency Management Agency's flood insurance program is officially back in business, now that President George W. Bush signed into law Monday legislation that restores the authority of the National Flood Insurance Program managed by FEMA.
The reauthorization enables the program to enter into new insurance contracts and ends a hiatus in such authorization that began when the previous authority expired on Dec. 31, 2002, while Congress was out of session.
The U.S. House and Senate passed the reauthorization act last week without amendment, according to a statement today from FEMA. The renewed authority enables FEMA to resume issuing new flood insurance policies and renewing or increasing coverage for existing policies.
FEMA Director Joe M. Allbaugh said the "quick restoration" was "a testament to the hard work" of the Bush Administration, the Congressmen who introduced the legislation and FEMA's partners.
The law makes the reauthorization retroactive to Dec. 31, 2002, which means insurance companies now can resume processing all flood insurance applications, renewals and requests for increased coverage received during the hiatus. They also can deposit the premiums they held during the hiatus and assign an effective date of the coverage according to the programs rules as if there had been no hiatus, according to FEMA.
Other aspects of the program, including floodplain management activities and the use of official flood map information weren't affected by the interruption in authority.
The program makes federally backed flood insurance available to homeowners, renters and business owners in communities that adopt and enforce floodplain management ordinances designed to reduce future flood losses by regulating new construction. Flood insurance is especially important for home buyers in high flood-risk areas, where flood insurance is required by law in order to qualify for mortgage loans from federally regulated lenders.
Nearly 4.4 million policies are in force in approximately 20,000 communities, according to FEMA. Claims and operating expenses of the flood insurance programs are paid from policyholder premiums not tax dollars.
The Federal Reserve Board in December issued interim guidance to assist borrowers and lenders in dealing with questions about what to do during the lapse in authority and today informed state member banks of the reauthorization.
Copyright Inman News Service
Contact ALTA at 202-296-3671 or firstname.lastname@example.org.