AIA OFFERS SUPPORT FOR NFIP BILL BEFORE CONGRESS; OPPOSES TAYLOR AMENDMENT
WASHINGTON, D.C., July 15, 2010 - The American Insurance Association (AIA) today urged the House of Representatives to pass H.R. 5114, legislation that would extend the National Flood Insurance Program (NFIP) for five years. The measure is expected to be voted upon later this afternoon.
“A long-term reauthorization of the NFIP is of great importance,” said Leigh Ann Pusey, president and CEO of AIA. “The recent lapses in the NFIP due to the use of short-term extensions have caused disruptions to homeowners, businesses and hindered real estate closings nationwide. A long-term NFIP reauthorization will bring much-needed stability to the market.”
One amendment, to be offered by Rep. Gene Taylor (D-MS), that would require “Write Your Own” insurers to eliminate so-called “anti-concurrent causation” language from their homeowners insurance policies" would prove detrimental to AIA’s support for H.R. 5114 if adopted. The Taylor amendment would negatively impact “Write Your Own” (WYO) companies and significantly alter the way in which claims are processed by the NFIP.
“Adopting the Taylor amendment would force WYO companies to take a hard look at whether they want to continue participating in the program and could actually result in a reduction in NFIP payouts to policyholders even when they are warranted,” added Pusey.
“AIA strongly supports the bill as passed by the House Financial Services Committee as it improves the program and promotes its fiscal soundness,” concluded Pusey.