Broad Spending Bill Signed Into Law: Extends Flood Insurance And Terrorism Insurance Programs
United States President Donald Trump signed into law the H.R. 1865 or Further Consolidated Appropriations Act 2020 on December 20, 2019. It provides several tax measures, including the extension of the National Flood Insurance Program (NFIP) and the Terrorism Risk Insurance Act (TRIA), which mainly addresses the property and casualty insurance industry.
The bill, which was cleared by the House of Representatives on December 17 with 297–120 votes and subsequently approved by the Senate on December 19 with 71–23 votes, allows the extension of NFIP through September 30, 2020. However, there were some concerns raised by the opposing parties regarding money management and the potential increase in federal deficit due to additional spending without corresponding cuts. The flood insurance program was scheduled to expire on the day President Trump signed this legislation, thus gaining continuity that was broadly supported by the Congress and the Senate.
Representative Maxine Waters believed that NFIP is a significant federal program, adding that it is more than just an insurance program. The NFIP has an essential role in the “disaster preparedness and resiliency by providing flood maps, setting standards for floodplain management, and investigating in mitigation for homes, businesses, and infrastructure.” This practically eases a person’s mind during a disaster, so he wouldn’t have to worry about anything beyond roof repair.
The newly enacted law also extends TRIA through 2027, a good seven years that was warmly welcomed by insurance companies.
Senior vice president of federal government relations for the American Property Casualty Insurance Association (APCIA), Nat Wienecke, commended the House for this bill. He said that it was a great example of how Congress did their job on time, considering the interest of the American people. As TRIA plays a significant role in stabilizing the nation’s economy, businesses, and the insurance markets, Congress enacted the act before it expired.
Jimi Grande, senior vice president of federal and political affairs of the National Association of Mutual Insurance Companies (NAMIC), also expressed appreciation for the timely approval of the bill, like a proper investment planning.
He said the Senate helped protect the economy from the threat of terrorism and keep the communities growing by voting the extension of the Terrorism Risk Insurance Program. It aimed to help revive the economy after the 9/11 attacks that brought back thousands of lost jobs as the development stopped due to a lack of affordable terrorism coverage.
Since then, it provided financial security for the growth of cities and towns from coast to coast. Thankfully, with the overwhelming support of the congressional leaders and lawmakers from all parties, it would continue to grow.
In addition, the bill repeals certain Obamacare taxes, including the “Cadillac tax,” a 40 percent excise tax to be implemented on high-end health insurance policies, scheduled to be effective starting 2022. Insurance companies rejoiced at the removal of such taxes, which may be precursors to bankruptcy.
The president and chief executive officer of Independent Insurance Agents & Brokers of America (the Big “I”) Bob Rusbuldt said that without revocation, the harmful tax would cripple a lot of their small business members and clients that could be worse over time. The damage it would impose on the employee benefits marketplace could have been devastating. Also repealed is the excise tax on medical devices and health insurer fee, which could have pushed insurance providers toward future money loans.
The act modified the provision as well for the purchase of tobacco products like cigarettes, electronic cigars, and nicotine vaping products by raising the legal age of buyers from 18 to 21 years old, nationally. Its previous minor patronizers may have criticized this change. However, the American Lung Association has been advocating for it, and the US Food and Drug Administration fully support the initiative to promote investments in health and well-being.
Another scope of the legislation is Setting Every Community Up for Retirement Enhancement Act (SECURE Act), which removes the age limit on retirement contributions and increases the age deadline for drawing on accounts to 72, which were positively received by the people.
Based on Materials from Insurance Journal
Photo Credits:
Britannica
ABC News
American Heart Association