Gayle R. Voller, supervisor, Property & Liability Division, State of T. Lawrence Jones, president, American Insurance Association, accom- Hon. Frank H. Rowland, mayor, Asbury Park, N.J. Page 137 Charles L. Rue, member, executive committee, National Association of Mutual Insurance Agents, accompanied by William A. Stringfellow, Ellie H. Schill, chairman, Committee on Federal Flood Insurance, National Association of Homebuilders, accompanied by Joseph B. McGrath, ALPHABETICAL LIST OF WITNESSES Bailey, William O., vice president, Aetna Life & Casualty. Boggs, Hale, U.S. Representative from the State of Florida. Bolton, John F., Jr., director of insurance, State of Illinois_ Clarke, Frank E., Geological Survey, Department of Interior_ Coates, Neil D., National Association of Insurance Agents... Garlock, Donald H., second vice president, Travelers Insurance Co--- Guglielmo, Dudley, insurance commissioner, State of Louisiana.--- Holderman, F. A., manager, legislative bureau, American Mutual Insurance Howard, James J., Representative from the State of New Jersey- Jones, T. Lawrence, president, American Insurance Association..... 139 136 158 Neville, John F., vice president, American Insurance Association- Pepper, Claude, U.S. Representative from the State of Florida.... Pollock, Howard W., U.S. Representative from the State of Alaska.... 20 Schechter, Henry, Director of Office of Economic and Market Analysis.. 9 Shea, Robert F., vice president, American National Red Cross- 56 Thomas, DeRoy C., general counsel, Hartford Insurance Group_. Voller, Gayle R., supervisor, Property and Liability Division, State of 137 Walters, Harold W., executive secretary, National Association of Mutual White, Morton V. V., vice chairman, Federal Affairs Committee, National Association of Insurance Agents.. Williams, Broward, chairman, Property and Casualty Subcommittee, Na- tional Association of Insurance Commissioners - Wood, Robert C., Under Secretary, Department of Housing and Urban MISCELLANEOUS STATEMENTS AND DATA American Insurance Association, statement of......- American Mutual Insurance Alliance, statement of American National Red Cross, prepared statement of Robert F. Shea, Asbury Park, N.J., statement of mayor. Clausen, Don H., U.S. Representative from the State of California, state- Memorandum on the constitutionality of the flood insurance program proposed under the provisions of S. 1985. Memorandum on the tentative estimated costs of the flood insurance program proposed under S. 1985--- Memorandum on the funding for disaster studies under section 402__ Preliminary estimates of flood damage in 1967 floods, additional Wood, Robert C., portion of statement submitted for the record.. Illinois State Director of Insurance, statement of.. John S. McGuinness Associates, statement submitted to the committee... Jones, Bennett G., Department of Commerce, statement submitted to the Justice, Department of, letter to Senator Sparkman from the Attorney 247 National Association of Home Builders, statement of Ellie H. Schill, 158 National Association of Insurance Agents, statement of.. National Association of Insurance Commissioners, statement of Broward Williams, Chairman, Property and Casualty Subcommittee.. National Association of Insurance Commissioners, report to, by the Sub- committee on Flood and Related Disasters Insurance.. National Association of Mutual Insurance Agents, statement of National Ready Mixed Concrete Association, statement submitted to the Estimates of dwellings in the 6 zones of flood frequency, 1966-... Office of Emergency Planning, disaster aid under Public Law 875, Tennessee Valley Authority, letter statement to Senator Williams. Texas State Board of Insurance, statement of... Travelers Insurance Co., statement of Donald H. Garlock, second vice Upper Mississippi Waterway Association, letter to Senator Williams-- 44 254 145 Wright, James F., letter to Senator Williams.. 251 NATIONAL FLOOD INSURANCE ACT OF 1967 MONDAY, JUNE 26, 1967 U.S. SENATE, COMMITTEE ON BANKING AND CURRENCY, SUBCOMMITTEE ON SECURITIES, Washington, D.C. The subcommittee met, pursuant to notice, at 10:05 a.m., in room 457, Old Senate Office Building, Senator Harrison A. Williams, Jr., presiding. Present: Senators Williams and Brooke. Senator WILLIAMS. We will start our hearings on flood insurance legislation. We have asked our witnesses to deal particularly with S. 1985, which can be considered the administration bill, which has been sponsored by 29 Members of the Senate and represents the final legislative expression of about 11 years of thought and deliberation on how we can bring to people who are in flood-prone areas a measure of property insurance. Copies of the bills, S. 1985, S. 1797, and S. 1290 may be found at page 165. Senator WILLIAMS. I have for some time been very much concerned about the extensive damages caused by floods and other severe storms to many of our river basins and seacoast areas. There is evidence to show that these damages seem to be increasing, rather than decreasing, in spite of protective measures taken by the Government. These losses may be particularly hard on a homeowner whose home is washed away but who still owes a mortgage, or a small businessman whose primary assets are tied up in his business. Many of these people never recover financially from a major disaster. Not only do flood losses cause a personal hardship on many of these individuals, but they also may have an adverse impact on the economic growth and development of many areas. Private insurance companies have not been able to write flood insurance policies for damages caused by floods on an economically feasible basis. Various Government agencies and other bodies have programs to provide assistance to flood victims, but these are generally not available unless a major disaster has occurred, and even then they may not be available in sufficient amounts to cover losses. It is for all of these various reasons that I have been interested in legislation to establish a national program of flood insurance. Three flood insurance bills, S. 1290, S. 1797, and S. 1985, are now pending before the subcommittee. I have asked that witnesses at these hearings direct the emphasis of their comments to S. 1985, which is the proposal of the Department of Housing and Urban Development. I am satisfied that the Department has come up with a workable and effective approach to provide insurance to victims of flood disasters. I have been very pleased at the cooperation that the private insurance industry has given to the Department in the development of this proposal. The National Association of Insurance Commissioners have also been very active in developing legislation in this field. I applaud them for their constructive efforts in this area. The HUD proposal would authorize a program of flood insurance with significant risk participation on the part of the property insurance industry and carried out to the maximum practicable extent by the industry. The Federal Government would assist the program by providing premium subsidies and reinsurance coverage when necessary. It is contemplated that the program will start slowly and would initially be restricted to those geographic areas where information is available upon which rates can be based. As data on the incidence and financial impact of flood in other areas is developed and correlated, the program will be extended to those areas. The bill would authorize flood insurance to be made available initially for one- to four-family residential properties, but coverage could later be extended to include other types of properties. There would be $15,000 aggregate liability for a single dwelling unit, and $30,000 for any dwelling structure with more than one unit. Liability for contents would be limited to $5,000 per dwelling unit. Owners of existing property in flood-prone areas would be entitled to the Federal premium subsidy, but owners proposing to construct new properties in these areas would be charged full actuarial_premiums. These provisions and others are designed to encourage State and local bodies to adopt and enforce sound land use controls, and to discourage construction and occupancy in high-risk areas. I would also like to emphasize that the proposed flood insurance program would complement and not supplement the activities of other Government agencies that have responsibilities for flood plain management and protection. I am particularly pleased to have a number of the members of the Banking and Currency Committee, including the chairman, Senator Sparkman, and the ranking minority member, Senator Bennett, join me as cosponsors in this legislation. With this kind of support, I am very hopeful that a flood insurance law can be enacted during this session of Congress. There is a real need in this country for this legislation. The hearings tomorrow will be held in room 2221, New Senate Office Building, and on Wednesday, in room 4232, New Senate Office Building. Without objection, I would like to insert in the record at this point a statement received from Senator Long of Missouri. (The statement follows:) STATEMENT OF EDWARD V. LONG, U.S. SENATOR FROM THE STATE OF MISSOURI Mr. Chairman, I appreciate this opportunity to express my support for S. 1985, the proposed National Flood Insurance Act of 1967. The fact that one-third of the Senate has chosen to co-sponsor it indicates the widespread interest in this legislation. Many areas of Missouri have suffered severely from floods, and the enactment of legislation to reduce losses has long been of concern to me. |