August 31, 2017 by Canadian Underwriter
The president and CEO of the Property Casualty Insurers Association of America (PCI) is calling on the U.S. Congress to pass at least a six-month extension of the National Flood Insurance Program (NFIP).
David A. Sampson said in a press release on Wednesday that the proposed extension would provide the Federal Emergency Management Agency (FEMA) administrator Brock Long “and his staff the space they need to help the people devastated by Hurricane Harvey put their homes and businesses back together.”
“While PCI and our members support meaningful reforms to the program, passing a minimum six-month extension of the program will allow time for the majority of the claims from Hurricane Harvey to be settled and any ongoing concerns identified and addressed before Congress and FEMA make significant reforms to the program,” Sampson said in the release.
He added that any extension should provide for the borrowing authority necessary to pay claims, and include The Flood Insurance Market Parity and Modernization Act. The act was unanimously supported in the House Financial Services Committee and passed unanimously in the U.S. House of Representatives last year.
“The bill would allow more private sector risk-bearing, thus relieving some of the taxpayer burden that the program is under now,” Sampson continued. “One immediate lesson that we have already learned from Harvey and recent previous storms, is that too few homeowners and businesses have flood protection and this bill also would expand consumers’ flood options.”
The Associated Press reported on Thursday that the number of confirmed deaths linked to the hurricane is now at least 31. A Houston-area chemical plant that lost power after the hurricane engulfed the area was rocked by two explosions early Thursday. The Arkema Inc. plant about 40 kilometres northeast of Houston lost power and backup generators due to the flooding, leaving it without refrigeration for chemicals that become volatile as the temperature rises.
Risk Management Solutions, Inc. (RMS) estimated on Wednesday that economic losses caused by wind, storm surge and inland flood from Hurricane Harvey could be as high as US$70-90 billion. The majority of the overall loss is likely to be from inland flooding in the Houston metropolitan area, where there are over seven million properties representing more than US$1.5 trillion in value, RMS said, stressing that the estimate was preliminary.
On Monday, catastrophe modelling firm AIR Worldwide said that Harvey-related winds and storm surge in Texas were expected to produce industry insured losses of between US$1.2 billion and US$2.3 billion.