WASHINGTON, May 24 (UPI) -- The U.S. Senate will consider a new bill to improve federal insurance programs against floods.
The legislation was unveiled just before the new U.S. hurricane season starts.
U.S. Senate Banking Committee Chairman Richard Shelby, R-Ala., Monday unveiled legislation to overhaul the federal government's flood insurance program by requiring more policyholders to pay fair-market rates and more homeowners to participate in the program than called for in a companion bill in the U.S. House of Representatives, CongressDaily reported Tuesday.
Shelby announced his panel would mark up the measure on Thursday, May 25. The measure aims to bolster the program -- funded by premiums and administered by insurance companies -- which is an estimated $23 billion in debt from claims for hurricanes Katrina and Rita last year.
Like the House measure, the Shelby bill would require policyholders with vacation homes to pay fair-market rates for their premiums. But the Senate measure also would end such subsidies for structures that have suffered severe repetitive losses due to flood claims, property that has incurred damage that exceeds its current fair market value and any property that has sustained substantial damage exceeding 50 percent of its fair market value or improvements exceeding 30 percent of its fair market value, CongressDaily said.
The Senate bill would also require homes that are near dams and levees and sit in a 100-year flood plain to have flood insurance. That requirement would be subject to the issuance of new flood maps. By 2009, all state-chartered financial institutions would have to require mandatory flood insurance on mortgages in a 100-year flood plain.
The Senate bill would also create a reserve fund to help pay claims in the case of major disasters, instead of borrowing money from the U.S. Treasury, the report said.
