Cited in InsuranceNews.Net:

“We’ve been here before, going back to 2008 to 2012 of extensions without any attempt to reform,” said R.J. Lehmann, director of finance, insurance and trade policy for the R Street Institute, a free-market think tank. “Now our focus is on November in the lame-duck Congress to see if there is any chance for either chamber to get together and agree to some basic reform.”

Lehmann said that most people hit by devastating floods in recent years, think Harvey, didn’t have flood insurance and weren’t in flood zones. Getting those people to buy coverage is important and that’s where the private sector can help.

Lehmann said there has been growth in the private insurance industry as of late, that in 2017 the number of policies grew by about 50 percent over the previous year. That represents about 15 percent of all flood insurance written in the country.

He said there are obstacles to continued growth in the private sector, including clarity from lending regulators on what terms they will accept for mortgages that are federally related and have a flood insurance requirement.

“There’s also the issue that for private companies to offer NFIP policies through the Write Your Own program, they currently have a non-compete [provision] and cannot write their own private policy,” Lehmann said. “We think that should be lifted.”

The program, as it is now, undervalues the potential flood risk of many in harm’s way. “The NFIP does not accurately measure or charge for flood risk, which means that tens of thousands of its policyholders are lulled into a false sense of security when they are really in harm’s way,” Dallas Rep. Jeb Hensarling, wrote in an email to colleagues. “The program also creates perverse incentives to build and rebuild homes in flood-prone areas.”

The extension was the sixth since December. Lehmann is hopeful, but not optimistic that reform can be accomplished rather than continuing the trend of extensions. Debt forgiveness is fine, he said, but some sort of compromise that aims for sustainability would have to be part of it next time.