NFIP Reauthorization

Dear Client,

Unless Congress approves legislation to extend the National Flood Insurance Program (NFIP), it is set to expire at midnight on Friday, December 20, 2019. If the NFIP’s authority lapses, the Federal Emergency Management Agency (FEMA) would retain the ability to pay valid claims with available funds but the sale and renewal of policies would cease.

Tuesday, the House passed a $1.4 trillion spending package that, if approved by the Senate and signed by President Trump, would extend the NFIP to September 30, 2020. According to Kellyanne Conway, the President plans to sign government spending bills to avoid a government shutdown.

Other legislation that focuses on long-term extension of the NFIP, adjustment of premiums, and other program reforms include S. 2187, H.R. 3872, and H.R. 3167. These bills were introduced in their respective chambers but have not progressed to a vote.

Proctor would like to draw attention to guidance previously issued by agencies that address lapses in FEMA’s authority under the NFIP. This guidance provides answers to frequently asked questions, entities’ responsibilities and a sample letter of reference. For complete details, please review the bulletins below:

FEMA: W-17069, Guidance on Potential Lapse in NFIP Authority

OCC: Guidance Regarding Lapse and Extension of FEMA’s Authority to Issue Flood Insurance Contracts

FDIC: Lapse of FEMA Authority to Issue Flood Insurance Policies

An expiration of the NFIP program would not affect your lender-placed flood insurance program with Proctor Financial, Inc.

We will monitor this topic and provide updates as they develop.

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