[StBernard] Taylor Introduces Flood Insurance Buy-In Act

[Westley Annis]

Full text of bill:
http://www.house.gov/genetaylor/TAYLMS.FLOODINS.pdf
http://tinyurl.com/an6hm

Taylor Introduces Flood Insurance Buy-In Act

Legislation to Help Tens of Thousands of Hurricane-Affected Gulf Coast
Residents

 

WASHINGTON, DC (September 27) - U.S. Congressman Gene Taylor today
introduced legislation that would allow property owners affected by
Hurricanes Katrina and Rita who did not live in floodplains and who did not
have flood insurance to purchase coverage under the National Flood Insurance
Program. 

        According to the Hurricane Katrina and Hurricane Rita Flood
Insurance Buy-In Act, the property owner would be required to pay the
equivalent of the National Flood Insurance Program (NFIP) premiums for 10
years, with a 5 per cent penalty. Premiums would be set at a rate equal to
the prevailing premium charged in the area prior to Hurricane Katrina. The
legislation also permits property owners to deduct premium payments and the
penalty from the NFIP claim payment.

        "Ten of thousands of homes and businesses were devastated by an
unprecedented 30-foot storm surge when Katrina passed through the Gulf
Coast. Katrina erased entire communities, and those communities are anxious
to rebuild," explained Taylor. 

        "Unfortunately, many homeowners and business owners were not
required or even encouraged by their banks or their insurance companies to
purchase flood insurance. Now, when they try to collect on their policies,
insurance adjustors are denying them coverage for damage caused by Katrina's
storm surge. 

        "We're faced with a situation where FEMA assistance for uninsured
losses is insufficient for major reconstruction, and SBA disaster repair
loans for damage are not a reasonable option to add on top of an existing
mortgage. There's huge potential here for a large numbers of defaults and
bankruptcies," added Taylor. 

        The Buy-In Act will limit flood coverage to the amount of wind
insurance coverage the property owner had at the time, with amounts not to
exceed the current NFIP ceilings of $250,000 for residential structures and
$500,000 for non-residential structures.

        "This won't be a program that allows people to grab the money and
run," warned Taylor. "If you buy into the flood insurance program, you agree
to enroll in the program for as long as you own that property. We want
people to rebuild, but they need to rebuild smartly and safely."

        The bill also protects current NFIP policyholders by specifying that
funds for claims payments must come from a separate appropriation of money.
The bill further protects current policyholders by prohibiting the NFIP from
considering the buy-in claims when setting future premiums. 

        The 29 original cosponsors of the Flood Insurance Buy-In Act include
all Democratic representatives from the congressional districts affected by
Katrina, including Congressmen Charlie Melancon (LA-03), Bennie Thompson
(MS-02), and William J. Jefferson (LA-02). Other original cosponsors include
the following members of Congress:

Gary Ackerman (NY-05)

John Barrow (GA-12)

Marion Berry (AR-01)

Earl Blumenauer (OR-03)

Dan Boren (OK-02)

Allen Boyd (FL-02)

G.K. Butterfield (NC-01)

Dennis Cardoza (CA-18)

Ed Case (HI-02)

Jim Costa (CA-20)

Robert E. "Bud" Cramer (AL-05)

Lincoln Davis (TN-04)

Harold E. Ford, Jr. (TN-09)

Barney Frank (MA-04)

Tim Holden (PA-17)

Steve Israel (NY-02)

Marcy Kaptur (OH-09)

Jim Matheson (UT-02)

Mike McIntyre (NC-07)

Michael H. Michaud (ME-02)

Dennis Moore (KS-03)

Collin Peterson (MN-07)

Earl Pomeroy (ND-At Large)

Mike Ross (AR-04)

Adam Schiff (CA-29)

David Scott (GA-13)

        Currently, the Missisippi Bankers Association, the Mississippi
Credit Union Association, and the Credit Union National Association have
endorsed the Hurricane Katrina and Hurricane Rita Flood Insurance Buy-In
Act. 

        Now that the bill has been introduced, it will likely be referred to
the House Committee on Financial Services for hearings. If the Committee
reports the bill favorably, it will move on to the full House of
Representatives to be scheduled for consideration on the House floor.

        Congressman Gene Taylor is the representative for the Fourth
District of Mississippi, which includes the Hurricane Katrina-ravaged cities
of the Mississippi Gulf Coast and South Mississippi. Taylor serves on the
House Committee on Armed Services and the House Committee on Transportation
and Infrastructure. He is currently participating as a member of the House
Select Committee to Investigate the Preparation and Response to Hurricane
Katrina. 

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