Opening Statement of Chairman Judy Biggert
Subcommittee on Insurance, Housing and Community Opportunity
Hearing on Legislative Proposals to Reform the National Flood Insurance Program

Good morning and welcome to today’s hearing, where we will examine legislative proposals to reform the National Flood Insurance Program or NFIP. 
 
However, before we start, I would like to take a minute to express deepest sympathy for the people of Japan as they cope with the aftermath of this tragic earthquake and tsunami.  While reports of the damage continue to surface, it’s clear this disastrous event will leave an indelible mark on the region.  My thoughts and prayers are with the people of Japan, not to mention our hopes that the effects on Hawaii and the West Coast will be minimal. 
 
And, I would like to note that Administer Fugate cannot join us today, given that he must remain at FEMA headquarters to monitor developments in Hawaii, Alaska, the West Coast, and the Pacific Territories and to coordinate possible federal assistance to state and local governments.  We understand his responsibilities and we hope to meet with the Administrator within the next few weeks.  
 
It is critical that -- well in advance of the NFIP’s September 30th expiration date --Congress begin a dialogue and shape a reform measure.  Millions of homeowners and businesses in Illinois and across the country -- not to mention our recovering housing market -- can ill-afford the turmoil caused by a program lapse, which occurred during the previous Congress.  That said, to the credit of my colleague, Ms. Waters, the former Subcommittee Chair, much progress was made on NFIP reform legislation, some of which is included in the draft bill that is under discussion today.
 
There is no question that the program is in dire need of reform.  For many years, the NFIP has been -- for lack of a better phrase -- under water.  With long-standing management and financial challenges and last reformed in 2004, the NFIP borrowed billions from taxpayers following the 2005 Gulf Coast hurricanes and continues to be financially unstable.  Since 2006, the NFIP has been cited by the Government Accountability Office as a high-risk federal program in need of fundamental reform.
 
Thus, it’s crucial that we work to restore the financial integrity of NFIP so that homeowners and businesses in flood-prone areas, like many in Illinois, are not left without any protection and taxpayers are not on the hook for the failings of NFIP.  Local communities and families in flood-prone regions across the nation depend on the NFIP, which is the largest single-line property insurer and provides flood coverage to more than five million properties including 250,000 on floodplains in Illinois.  According to the Illinois Department of Natural Resources, nearly 15% of Illinois’ land is subject to flooding.
 
We must work toward a long-term plan for flood insurance that eliminates taxpayer risk.  In the near-term, important reforms to the NFIP must improve its financial stability, reduce the burden on taxpayers, and examine ways to increase private market participation.
 
Today, I would like to welcome guest-Members to our Committee, regulators, engineers, insurers and reinsurers, realtors, home builders, and many other experts to examine near- and long-term strategies for a flood insurance program that our families, businesses, and local communities can count on.