The Senate has established a path toward prompt action onlegislation delaying most of the flood insurancerate increases.

The fact that the legislation delaying most of the rateincreases could possibly be acted on by the end of the year comesas the National Council of Insurance Legislators virtuallyunanimously passed a resolution at its annual meeting over theweekend in Nashville, Tenn. urging some form of delay on the rateincreases.

Also disclosed was the letter urging delay of rate hikespresented to President Obama at a meeting last Thursday with stateinsurance regulators by Jim Donelon, Louisiana insurancecommissioner and current president of the National Association ofInsurance Commissioners.

The issue is of vital insurance to a major segment of theproperty and casualty insurance industry.

In a letter last week to Congress, a group of Write-Your-Owncompanies said that before Congress decides to revise the rateincrease programs required under the Bigger-Waters Act of 2012 it“must realize and acknowledge” that any changes will take no lessthan six months for WYO insurers to implement.

“We hope that any proposed legislative changes would bediscussed with the NFIP and other stakeholders as they are beingdeveloped to avoid further unintended consequences,” the lettersaid.

According to industry lobbyists intimately involved in theNational Flood Insurance Program, Senate staffers will be spendingthe current Thanksgiving recess “whittling down” proposedamendments to the National Defense Reauthorization Act, S. 1867.The bill is currently on the Senate floor, and is must-dolegislation with strong bipartisan support.

The Senate briefly reconvened today and will hold a pro formasession Nov. 25 and will hold a pro forma session Tuesday.

However, votes will not resume until Nov. 28, and Senatestaffers are spending that time to reduce the number of amendmentsto the NDAA to 30 or 40.

The lobbyist said that, “there is no guarantee” that theHomeowner Flood Insurance Affordability Act, S. 1610, will be onthe list cleared for floor action, but it has “broad bipartisansupport.” If the flood bill, sponsored by Sen. Mary Landrieu,D-La., and Sen. Robert Menendez, D-N.J., clears various hurdles andpasses the Senate through the NDAA in some form, it will godirectly to conference and therefore bypass the need for action bythe House Financial Services Committee, where there is significantopposition to whittling down the route to actuarial rates imposedby the Biggert-Waters Act of 2012, the lobbyist said.

Under the Landrieu/Menendez bill, most of the rate increasesimposed by B-W 12 would be delayed for up to four years. Onlyprovisions imposing actuarial rates on businesses and second homeswould be retained under S. 1610.

One industry lobbyist who is closely tracking he issue “says theLandrieu/Menendez bill has strong bi-partisan support and thesupport of the majority leader,” Sen. Harry Reid, D-Nev. “Plus notputting it on could 'gum up the works',” i.e., delay indefinitelyaction on the underlying bill.

“So, it has an excellent chance,” the lobbyist said.

“I think that the Landrieu./Menendez amendment will get on theshortlist and will either be included in the manager's amendment orput to an up or down vote on the floor,” the lobbyist said. “Eitherway, I think it becomes part of the Senate NDAA,” and goes directlyto conference and final passage once passed by the Senate,” hesaid.

The NCOIL resolution says that B-W 12 “substantially andimmediately devalued the investments made in all properties endowedwith flood damage mitigation measures, as well as propertiesreceiving subsidize rates.”

The resolution predicts that consumer confidence and thenation's economy, including the banking and mortgage industries,will suffer—and says that “a violent rise” in premium costs maylead to financial distress for residents and property owners aroundthe nation.

The resolution also, among other things, urges Congress and FEMAto actively and expeditiously explore the use of privatereinsurance to protect against catastrophic loss.

The letter to Obama was drafted by the Greater New OrleansOrganization, and was signed by hundreds of trade groupsrepresenting businesses and consumer groups, members of Congress,and other interested parties throughout the country.

It says that, “Severe repetitive loss designated propertiesnotwithstanding, we respectfully urge you to administratively delayimplementation of rate increases on all pre-Flood Insurance RateMap (FIRM) businesses, non-primary residences, and homes purchasedafter enactment of the B-W-12, as well as the purchase provision onall pre-FIRM primary residences.”

Ironically, the letter adds, “while these increases wereintended to make the NFIP solvent and protect taxpayers, it couldhave the opposite effect if business and homeowners are forced todrop flood insurance completely or face foreclosure as aresult.”

Originally published on PropertyCasualty360. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.