NFIP Bill Good, But Not Perfect

by Matthew Glans on March 8, 2011

The National Flood Insurance Program (NFIP) has been plagued by huge deficits in recent years, due to poor management and a flawed philosophy. New reforms are currently being considered that would extend the program while changing how some of NFIP’s subsidies are applied.

In articles recently published by the National Underwriter and Insurance & Financial Advisor, members of the Smarter Safer coalition, including Eli Lehrer, vice president of DC operations for The Heartland Institute, comment on the reform proposal for the NFIP, calling the bill a “very good starting point, but not a perfect one.”

In the two articles, Smarter Safer focused both on the growing deficit facing NFIP and caution legislators againist adding more coverage to the program.

From IFANews:

“The NFIP is more than $18 billion in debt, which threatens its viability, according to, a national coalition supporting environmentally responsible, fiscally sound approaches that promote public safety.

The bill to be introduced in the House indirectly would give NFIP a firmer financial fund to pay out the debt more quickly than it is, although it does not do anything that forgives the debt, according to Eli Lehrer, vice president of the Heartland Institute, who also spoke during the teleconference.

Lehrer expressed concern about the addition of new coverage for business interruption and mandatory purchase requirements that are not enforced to the extent they could be.

“This program is already $18.3 billion in debt,” Lehrer said, “and there’s no way of paying it back. Adding more coverage is a problem.”

The National Underwriter article, “House GOP: FEMA Should Look Into Privatizing Flood Program,” was written by Arthur D. Postal and published on March 7. It is available online at:

The Insurance & Financial Advisor article, “House’s Planned Flood Insurance Reforms ‘Good Start,’ but not ‘Perfect,’” was written by Jaime L. Brockway and published on March 8. It is available online at:

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