WASHINGTON – President George W. Bush signed into law on June 30 the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (S. 2238) that reauthorizes the National Flood Insurance Program (NFIP), administered by the Federal Emergency Management Agency (FEMA) through 2008. The measure is effective immediately. Reforms in the law will address the problem of reoccurring loss properties through flood mitigation. The law authorizes the launch of a pilot program that will require people to either accept mitigation assistance or face significantly higher premiums. Owners who refuse assistance will no longer be eligible for subsidized flood insurance far below the actuarial risk rate they should be paying. Flood insurance is required by law in flood areas in various states to obtain a mortgage, which is why credit unions were interested in the legislation. FEMA estimates that repetitive loss properties cost NFIP $200 million annually.
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