BIG “I” SUPPORTS OXLEY-FRANK FLOOD INSURANCE REFORM LEGISLATION
Bipartisan legislation represents major step forward toward needed reforms
WASHINGTON, D.C., Nov. 15, 2005—The Big “I” strongly supports a bipartisan flood insurance bill introduced today in the House of Representatives containing major reforms that are advocated by the Independent Insurance Agents & Brokers of America (the Big “I”).
The bill, H.R. 4320, the National Flood Insurance Program Commitment to Policyholders and Reform Act of 2005, has been introduced by House Financial Services Committee Chairman Mike Oxley (R-Ohio) and Ranking Member Barney Frank (D-Mass.). It contains a number of the 22 reforms suggested last week in a comprehensive flood modernization agenda released by the Big “I”. (Click here to see the Nov. 11 release.) Chief among these are the addition of optional business interruption coverage on commercial policies, increases in the maximum coverage limits, and the inclusion of additional living expenses coverage for residential policies.
“The Big “I” thanks Chairman Oxley and Ranking Member Frank for moving so quickly on an issue of the utmost importance to property owners throughout the country. We strongly support their legislation and are very pleased that a number of our reform principles have been included in this bipartisan, forward-looking bill,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs and federal relations. “This legislation will bring about many needed reforms that will not only assure the solvency and effectiveness of the National Flood Insurance Program for years to come, but also help consumers by providing new levels of coverage, such as business-interruption insurance. This bill is good for the program and for policyholders all over America.”
Big “I”-backed provisions in the bill include the following:
- Business Interruption: The inclusion of optional business interruption insurance for commercial policyholders.
- Maximum Coverage Limits: Increase the maximum coverage limits above current $250,000/residential $500,000/commercial limits to correspond with modern-day real estate prices.
- Additional Living Expenses Coverage: Provide an automatic, base amount of additional living expenses coverage on residential policies with an option to purchase increased coverage for a fee.
- Repetitive Losses: Consider elevation/retrofitting/buyout for properties prone to repetitive flooding.
- Mitigation: Enforce mitigation provisions from the Flood Insurance Reform Act (FIRA) of 2004.
- Coverage Model: Extend the mandatory coverage model beyond the 1-in-100 year floodplains to 1-in-500 year floodplains.
- Levee-Protected Areas: Mandate coverage for those living in levee-protected areas.
- Mapping: Report to Congress on the progress of map modernization.
- Tracking System: Improve oversight to ensure full participation in the program for owners of properties for which participation is mandatory.
- Policy Language Clarification: Coordinate flood policy descriptions with other property and casualty lines of insurance to avoid inconsistency in terms.
“The inclusion of these provisions is terrific,” says Patrick O’Brien, Big “I” director of federal government affairs. “In addition to extending the offer of business-interruption coverage and living-expenses coverage, it will also strengthen the enforcement of mandatory participation requirements and fully implement the mitigation pilot program in FIRA 2004. This will go a long way toward keeping this valuable program viable while at the same time ensuring a quality product and quality service to insurance consumers.”
Founded in 1896, IIABA (the Big “I”) is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.
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