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Senate bill takes aim at natural disaster risk management

The National Flood Insurance Program (NFIP) is set to expire at the end of September. In light of recent budget debates, the fate of the program is uncertain, adding another insurance worry to Floridians' plates. It was hard for residents here to watch the news coverage of the windstorm that took down stage rigging at a state fair -- not from a lack of empathy, but from that sense memory of living through hours of 60- to 70-mile-an-hour winds and flooding that come with a hurricane.

It feels as if 2011 has been an unusually active year for natural disasters. Tornadoes this spring wiped towns off the map; floods and droughts and wildfires have devastated communities across the country. Internationally, an earthquake and tsunami in Japan left 24,000 dead and nuclear power plants in peril.

And it's only August.

Congress has not failed to notice the trend, but NFIP remains the only national risk management program. Now, a handful of lawmakers are trying to address the enormous price tag that comes with every disaster.

The task isn't easy, of course, especially considering that NFIP, operated by the Federal Emergency Management Agency, is seriously in debt. Recent estimates are in the $17 billion range.

Something, then, isn't working. Either we as a nation are just plain bad at predicting and preparing for weather-related disasters, or Congress hasn't any idea how much these events cost.

State insurance commissioners have long supported the development of a comprehensive national disaster risk management plan. One proposed Senate bill would set up a National Commission on Natural Catastrophe Risk Management and Insurance to help do just that.

The commission would be charged with studying the risks of natural disasters and then reporting its findings and recommendations to Congress. The group would sunset 90 days after submitting the report. No mention is made of the timeline for delivering the study.

Congress has less than 45 days to figure this out. Last September, when the current extension was passed, lawmakers explained that the one-year extension would give Congress a chance "to address NFIP's shortcomings, including the deficit," as we reported.

To date, one bill has passed the House; it now awaits consideration by a Senate committee.

Source: Risk & Insurance, "A National Disaster Commission," Dan Reynolds, Aug. 9, 2011

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