In a victory for the insurance industry, the U.S. Senate Wednesday night soundly rejected efforts by coastal senators to add wind coverage to the National Flood Insurance Program.
The Senate voted, 73-19, against the wind provision, despite exhortations by senators from
Such a provision is included in the House version of the bill, but a Government Accountability Office report and a message to the Senate by advisers to President Bush this week recommending a veto of the bill if it contained such a provision apparently weighed heavily on the final vote.
The insurance industry, joined by consumer and environmental groups, lobbied heavily against adding such coverage to the program.
Ben McKay, senior vice president, federal government relations, of the Property Casualty Insurers Association of America., said he believes the vote will help clear the way for final action on the renewal and reform bill before the program’s authorization runs out Sept. 30.
“The Senate's vote should be the death knell for the wind amendment,” Mr. McKay said, adding that Rep. [Barney] Frank, D-Mass., chairman of the House Financial Services Committee, “said last year that he would not insist on keeping the windstorm provision if it would kill the overall flood bill.”
With the Senate's rejection of that provision, Mr. McKay said, “the White House's stated intention on vetoing a bill that contains it, and the recent GAO report showing onerous costs to taxpayers if it is included, it is clear that the wind language would ultimately kill the flood bill.”
Now, he said, “the House can focus on the viable provisions of this legislation.”
The bill would reauthorize the insurance program while phasing out below-market rates for second homes, increase annual deductibles, and erase more than $17 billion in debt accumulated as a result of Hurricane Katrina.
The program must be reauthorized because it expires at the end of the current government fiscal year, Sept. 30.
Work on the bill will continue Thursday, but a final vote will be delayed until next week, after debate Monday on two nonrelated amendments dealing with energy issues.
“We've had good cooperation on both sides. What we're going to try to do is finish this bill,” Senate Majority Leader Harry Reid, D-Nev., said.
A key vote Thursday will be on an amendment by Sen. Landrieu that would create an inspector general within the parent agency of the program to ensure that insurers don’t inappropriately push wind liabilities to the NFIP. "I don't know why the [original] bill drafted in the Senate Banking] Committee didn't come down harder on this," Ms. Landrieu said.