The National Flood Insurance Program (the “NFIP”) expired March 28, 2010.  Since March 28, 2010, the NFIP has not been in operation and has not issued new and renewal policies and has not increased coverage amounts on existing policies.  Flood insurance policies are required by lenders to close on real estate sales in flood hazard areas.

Yesterday the U.S. Senate voted to end floor debate on a bill that includes reinstating the NFIP retroactive to March 28, 2010.  The reauthorization provision is contained in a bill that also includes the extension of unemployment benefits and COBRA health insurance subsidies.  The House approved the bill on March 17, 2010.  There is no guarantee, however, that the senators that voted to end the debate on the bill will vote in favor of passing the bill. If the legislation passes, the NFIP will only be extended until April 30, 2010, and the legislatures will have to extend the NFIP again in a few weeks.

As we previously reported here, industry groups believe that long-term reforms are necessary with respect to the NFIP and that the short-term extensions should be for a longer period of time since Congress is currently occupied with other pressing matters that jeopardize the NFIP’s continuity and certainty in the market.

We will continue to monitor NFIP-related developments and provide further updates at InsureReinsure.com.