WASHINGTON – U.S. Congresswoman Candice Miller (MI-10) today made the following comments regarding the U.S. House of Representatives’ passage of the Flood Insurance Reform Act of 2011 (H.R.1309), which provides a five year reauthorization for the National Flood Insurance Program (NFIP). Miller offered two amendments to H.R.1309: first amendment would have terminated NFIP; second amendment would have terminated current spending on Television and Radio commercials being aired to promote the flood insurance program. Both amendments were voted down.

“While I am glad the U.S. House made efforts to make much needed changes to this program, I am still committed to eliminating this actuarially unsound, failing federal program,” Miller said. “The federal government is a bad insurance company, and we should be focused on allowing states to form regional insurance compacts to spread their risk, as well as working to further open the market for private insurance options – all without the federal government running the program.

“We cannot allow this failing program to continue spiraling into additional billions of dollars of debt for a few more years. We must keep constituents like the ones from my home state of Michigan from serving as an ATM machine for other parts of the nation who face an extremely higher risk of flooding. I will continue to take up this issue and work with my colleagues in the House on further reforming this program, allowing homeowners to rightly take control of their flood insurance and get the federal government out of the flood insurance business,” Miller concluded.

Note: Started in 1968, the NFIP has been consistently in debt, currently topping at roughly $18 billion, and Congress has had to continually raise its purchasing debt limit. In addition, one out of every four property owners in the program receives subsidized rates and others in less flood prone areas are forced to pay significantly higher rates than they should based upon risk. NFIP is a bad deal for Michigan because these rates are not set in an actuarially sound method. For example, from 1978 to 2010, Michigan residents paid $284.4 million in premiums and received $45 million in claims. That means Michigan policy holders paid more than six times in premiums to what they received in benefits. Meanwhile due to heavily subsidized rates in other areas of the country, residents in Louisiana for instance paid $3.9 billion in premiums and received $16 billion in claims. (Source: Congressional Research Service). To see more information regarding a state-by-state comparison: http://www.fema.gov/business/nfip/statistics/pcstat.shtm

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