“This is not an entitlement program,” Harty said. “This is a contract with the American people.”

Harty said that, “Hurricane Sandy crashed unexpectedly into the lives of millions of homeowners, renters and businesses. More than 100,000 of them will file a claim, quite a few for the total insured value of their now-destroyed homes.”

Harty said that while many more people should have bought flood insurance when they had the chance, the federal government has an ethical and legal obligation to pay in full the claims filed by people who have loyally paid their NFIP premiums year in and year out.

“Paying a claim is not an emergency handout – it's fulfilling the government's part in an insurance contract. It's returning to policyholders the money they paid in over the years as premium.”

Harty said it is clear that losses from Sandy will exhaust available NFIP reserves, requiring the program to exercise its already–authorized borrowing authority.

“But if the NFIP is going to stand up and deliver on those insurance contracts, it will need additional borrowing authority.”

He said, “If Congress doesn't increase that authority – and do it very soon – tens of thousands of families and businesses will be without the cash they need to restore their homes, their businesses and their lives.

“Now-homeless people in Staten Island and New Jersey and on the Long Island shoreline, living in shelters with their homes destroyed, can't be made subject to the timetable of politics. This authorization has to proceed on the timetable of both good business practices and human compassion,” he said.

Tony Bullock, lobbyist for the NFS in Washington, added that it might be premature to project what the borrowing limit should be increased because it is still too early to tell what flood insurance losses from Sandy might be. He said the current estimate is between $6 billion and $8 billion.

Anyway, he said, “an increase in NFIP borrowing authority will be tucked into must-do legislation before Congress leaves for the year.”

He added, “Members of Congress won't want to be responsible for default of this program.”

Edward L. Connor, deputy associate administration of the Federal Insurance and Mitigation Administration, a unit of the Department of Homeland Security, explained the issue to industry officials Wednesday at a meeting of the Federal Advisory Committee on Insurance convened by Michael McRaith, director of the Federal Insurance Office.

He said the “burn rate” at which the agency is going through money will require it to use up its $900 million in cash and its remaining $2.9 million in borrowing authority by the end of the month in order to pay claims generated by Superstorm Sandy.

Cheney said his concerns are based on informal talks with various congressional delegations by insurance commissioners dealing with the Sandy issue.

This indicated concern by some members of Congress about dealing again with the NFIP so soon after Congress voted a 60-month extension of the NFIP in July after five years of effort.

“There doesn't appear to be support in some congressional delegations for an increase in borrowing authority because the program has just been reauthorized until September 2017. “Their concern is that they don't want to revisit the issue this soon,” Cheney said.

At the same time, Cheney said a “compromise is likely to be struck by the Obama administration and Congress before the lame duck session ends.”

Cheney spoke from the quarterly meeting of the National Council of Insurance Legislators, now being held in Mobile, Ala.

He said commissioners from Louisiana, Alabama, Texas and Massachusetts held a meeting about the issue in Mobile yesterday with industry and FEMA officials, and a panel discussion on the issue is being convened later Friday.

He said commissioners would meet with members of Congress while attending the quarterly meeting of the NAIC in National Harbor outside Washington, D.C. the week after Thanksgiving and he will hold a public hearing on the issue Dec.2 during the NAIC meeting in National Harbor.