
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, May 4, 1994                   TAG: 9405040156
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A1   EDITION: STATE 
SOURCE: Associated Press Note: below
DATELINE: WASHINGTON                                 LENGTH: Short

HOUSE BILL REQUIRES MORE TO BUY FLOOD INSURANCE

More people in flood-prone areas would have to purchase flood insurance under a bill passed Tuesday by the House aimed at rescuing the National Flood Insurance Program from insolvency.

The legislation, approved by a 335-60 vote, requires that all mortgage lenders make sure that borrowers in flood-hazard communities purchase federal flood insurance as a condition of their loan.

It also provides up to $65 million a year to reinforce or relocate structures in flood-prone areas and acquire frequently flooded land for public use. Another section sets up a study on the economic impact of coastal erosion.

The current program, run by the Federal Emergency Management Agency, is ``technically insolvent,'' said Rep. Joseph Kennedy II, D-Mass., chairman of the Banking, Finance and Urban Affairs Committee panel on consumer credit and insurance. ``This is a program that is crying out for reform.''

The program, established in 1968, is a perennial money loser because only about 17 percent of the estimated 10 million residential properties in flood-hazard areas are insured. Kennedy said that billions of dollars paid out in disaster relief after last year's Midwest floods could have been saved if more people had been insured.

Rep. Doug Bereuter, R-Neb., said the existing program has ``failed in its mission.'' He said it is ``riddled with opportunities for ridiculous abuse by property owners [and] faced with an insolvent insurance fund due in large part to abysmal lender compliance.''

In January, the fund was forced to borrow $100 million from the U.S. Treasury when it ran out of money.

by CNB