[StBernard] FSC Website Update- Press Release

[Westley Annis]

Reps. Biggert and Frank Introduce Bipartisan Legislation for Flood Insurance
Reform and Modernization

Washington, DC - Today, Reps. Judy Biggert (R-IL) and Barney Frank (D-MA)
introduced H.R. 1682, the Flood Insurance Reform and Modernization Act of
2007.  The legislation will reform the National Flood Insurance Program
(NFIP) and ensure its continued viability by increasing accountability,
eliminating unnecessary Federal subsidies, and updating the flood insurance
program to meet the needs of the 21st century.  The bipartisan bill is also
sponsored by Reps. Earl Blumenauer (D-OR), Gary Miller (R-CA), Gene Taylor
(D-MS), Richard Baker (R-LA), Doris Matsui (D-CA), JoAnn Davis (R-VA),
Maxine Waters (D-CA) and Ginny Brown-Waite (R-FL).

"Congress must act now to modernize this important safety net for
homeowners," said Rep. Biggert, Ranking Member of the House Financial
Services Subcommittee on Housing and Community Opportunity.  "The 2005 Gulf
Coast hurricanes showed the nation how important the National Flood
Insurance Program is to the average homeowner.  We must act to strengthen
and pull the program into the 21st Century and before the next major
disaster hits.  The program needs to provide a financial safeguard for
homeowners while protecting the interests of taxpayers.  This bill strikes
the right balance."

The Flood Insurance Reform and Modernization Act of 2007 will address a
number of weaknesses in the NFIP that were exposed by the unprecedented 2005
hurricane season.  In an effort to make the program more actuarially sound,
the NFIP phases out subsidized rates on vacation homes and second homes.
Under this bill, small business owners will be eligible to purchase business
interruption coverage in order to meet payroll and other obligations in the
event of flooding.  And, for the first time since 1994, the bill updates
maximum insurance coverage limits for residential and nonresidential
properties. 

"The National Flood Insurance Program is vital to flood-prone communities,
but it has not always functioned as intended," said Rep. Blumenauer. "With
global warming putting more and more people at risk for flooding, this
legislation builds on progress made in the Bunning-Bereuter-Blumenauer Flood
Insurance Reform Act of 2004 to make the program more fiscally sound and to
ensure that homeowners in low-lying areas can take steps to reduce their
vulnerability."

"I am proud to support this bill because it shores up the National Flood
Insurance Program and proposes a number of needed reforms to make the
program actuarially sound.  It also includes language to ensure that those
who live in flood-prone areas are aware of the insurance options available
to them and have the opportunity to purchase flood coverage," said Rep. Gary
Miller.  "Importantly, it does all this without changing the 100-year flood
plain standard and needlessly expanding the coverage mandate to include
millions of additional Americans whose homes are not at risk." 

Under the NFIP, which is administered by the Federal Emergency Management
Agency (FEMA), flood insurance that could not be purchased in the private
marketplace is made available to homeowners, renters and business owners in
more than 20,000 communities across the country.  This bill requires greater
accountability and financial responsibility at the NFIP.  FEMA is required
to report to Congress on the financial status of the NFIP and conduct a
thorough review of the nation's flood maps.  The bill makes the updating and
modernization of flood maps an ongoing process, and calls for greater
disclosures to consumers about flood insurance.

The NFIP borrowing authority is increased to ensure that all outstanding
claims and Federal obligations are paid.  The bill increases the amount FEMA
can raise policy rates in any given year from 10% to 15%.  And, in order to
help ensure that those homeowners who should have flood insurance do have
flood insurance, the bill increases the fines on lenders who do not enforce
the mandatory flood insurance policy purchase requirement for those who live
in a floodplain and hold a federally-backed mortgage.

"This bill has been very carefully drafted and has passed out of the House
before," said Rep. Barney Frank, Chairman of the House Committee on
Financial Services.  "It gives members an unusual chance to respond to the
concerns of those who are pressing to reduce government expenditures and
those who want to enhance environmental protection."