Thursday, June 23, 2011

Today's Senate NFIP Hearing!

There were some signs of intelligence from the panel of outsiders briefing the Senate Banking Committee tomorrow. But no real concensus except for a lengthy NFIP statutory extension. Not much in the way of intelligence expressed by the Senators themselves. Clearly the fact that the flood insurance program is drive by science and engineering and land use not insurance principles continues to escape most of the Committee.

And the NFIP officials continue to waste legislative opportunities to strengthen the NFIP. The GAO witness was equally unhelpful and wondering how this important federal program escapes from sophisticated analysis. Senator Vitter of Louisiana of course begged that this crucial program for Louisiana's survival be extended and made cheaper and broader as a relief program for that clueless state.

I now see why so few real reforms came out of the financial meltdown. This Senate Committee is just not smart people and a drag on the future of the USA.

Even the Homebuilders rep made nothing but special pleading trying to avoid tough enforcement by the feds, the states and the locals as if the developers had not been almost totally responsible for development of housing in substandard areas.

So the NFIP will be extended from its September 30th expiration and most of the effort to modify will be to study it more as if its problems are unknown to one and all.

The bottom line of course is that flood insurance and disaster outlays will be increasing not decreasing as STATES and their local governments continue to be grossly negligent in allowing unwise development.

There are solutions to the NFIP's problems but few understand them enough to articulate them and see their implementation. One key one of course would be to void all policies issued ab initio when determined post claim to be in violation of flood plain management regulations but give innocent homeowners the right to sue their community for damages for allowing such a violation to occur.