Eric Cantor’s Loss Put Flood, Terror Insurance Center Stage

Eric Cantor’s Loss Put Flood, Terror Insurance Center Stage

Two major catastrophe insurance policy issues were at the center of a surprise loss of Rep. Eric Cantor (R-Va) on Tuesday and the resulting political fallout may throw into doubt reinsurance industry lobbying efforts on one front for weeks to come.

In his lead up to the win, Cantor’s Tea Party opponent — David Brat— used the House majority leader’s support of a rollback in reforms to the National Flood Insurance Program as part of his successful effort to unseat the powerful Republican.

On Brat’s “Issues” page the candidate argued that “Eric Cantor has been a consistent supporter of big government. He [voted] to undo reforms to the National Flood Insurance Program (H.R. 3370, 3/4/14).” In other forums Brat criticized the flood insurance program and its implementation. “Who does that go to? A lot of the money goes to gazillionaires on both coasts who have homes in nice real-estate locations,” Brat was quoted as saying.

Earlier this year Congress passed H.R. 2270 (the Homeowner Flood Insurance Affordability Act) which curbed some of the premium increases in the nation’s flood insurance program.

Cantor did not make any friends when pushing through the flood insurance reform rollback, including House Financial Services Chairman Rep. Jeb Hensarling (R-Texas). When Hensarling stated that he would not “part of any program, policy, act that hastens the bankruptcy of a program that is already underwater,” the House leader used Congressional rules to work the bill around the committee’s approval.

While that may all be flood water under the bridge, the political illl will and Cantor’s loss does not bode well for the catastrophe insurance issue not yet resolved: the Terrorism Risk Insurance Act.

There terror insurance backstop expires at the end of this year, and legislation to renew the program is currently in negotiations.

The lame duck House leader was a major proponent of TRIA’s renewal, however he has now only a month and a half to move the legislation through the house before he resigns his House leadership position on July 31. Cantor did say in a news conference Wednesday that TRIA renewal remains on this now shot-lived todo list.

“We’ve got a full set of bills. We’ve probably got another group of human trafficking bills to be done. The chairman of the House Financial Services Committee, I believe, has announced a markup on the TRIA bill. We’ll look to do that this summer,” Cantor said, according to an transcript.

But still standing Cantor’s his way is Chairmen Hensarling, whom not only was snubbed during the flood insurance debate but also as expressed an interest in scrapping or significantly curtailing the terrorism insurance program,

“It would probably come as no surprise to anyone that if we posit that private insurance companies are incapable of modeling this risk, how can we be convinced that the federal government is any better as our National Flood Insurance Program is under water, pun intended?,” the congressman said during TRIA hearings last year.

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