Washington has been drowned in a deluge of flood insurance lobbyists as Congress gets to work on renewing a federal flood program.
The National Flood Insurance Program (NFIP) is set to expire on September 30, and Congress hasn’t yet reauthorized it. That’s caused a spike in the number of groups lobbying on flood insurance – a number that jumped 51% in the second quarter from the same time last year. Fifty-three companies that didn’t lobby on the subject last year – including big banks like Wells Fargo and U.S. Bancorp – have lobbied on flood insurance this year.
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Some groups that lobbied on flood insurance last year dropped off the list this year, according to a Bloomberg report – but there was still a net gain of 38, meaning flood insurance lobbying groups spiked from 74 to 112 year over year.
It’s little wonder so many groups are lobbying for flood insurance. A collapse of the NFIP could spell economic disaster for flood-prone areas. If the program lapses, the Federal Emergency Management Agency wouldn’t be able to issue new policies or renew existing ones, Bloomberg reported. Lack of flood coverage generally discourages lenders from writing checks, which in turn could knock the legs out from under industries like construction and real estate sales.
The Mortgage Bankers Association – one of the new lobbyists – said that failure to reauthorize the NFIP could cause “business disruption.”
“MBA’s main concerns are the timely reauthorization of the program to minimize business disruption, expanded private market insurance alternatives that comply with NFIP program requirements, and an exemption for commercial properties from the NFIP mandatory purchase requirements,” Bill Killmer, MBA senior vice president of legislative and political affairs, told Bloomberg.
Lawmakers are also considering opening the flood market up to private insurers – a possibility that’s led to lobbying by a number of insurance companies hoping to get into the space.
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NFIP reauthorization and the future of flood insurance
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