FEMA to insurers

FEMA to insurers: No flood policies during shutdown

Dec. 27, 2018 – The Federal Emergency Management Administration (FEMA) yesterday issued new guidelines instructing insurers not to sell or renew flood insurance policies during the partial government shutdown. The announcement took many by surprise, since last week Congress passed and the President signed legislation reauthorizing the National Flood Insurance Program (NFIP) through May 31, 2019.

FEMA’s cited the Antideficiency Act (ADA) as the source for its ruling. The ADA generally prohibits federal expenditures/obligations in excess or advance of appropriations, except in cases of “emergencies involving … protection of property.”

The National Association of Realtors® (NAR) says the opinion is contrary to the Congressional reauthorization and intent. Further, NFIP is funded by premiums paid by policyholders, not appropriations, so ADA should not apply.

NAR is leading a multi-industry effort, including insurers, lenders and other financial services groups, to reverse this decision. It’s also working with key members of Congress as well as the White House to intervene.

In a release today, U.S. Sen. Marco Rubio (R-FL) asked the Office of Management and Budget to reverse FEMA’s decision. “I strongly disagree with [FEMA’s] guidance, as it incorrectly interprets Congressional intent demonstrated last week,” he said.