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The Obama Administration has problems with the Senate bill that would delay flood insurance premium increases and create an agent licensing registry.

The bill, S.1926, was cleared for debate on a procedural vote, 86-13, Monday evening. It has more than 30 sponsors from both parties in the Senate. Lead sponsors are Sen. Robert Menendez, D.-N.J., and Sen. Johnny Isakson, R.-Ga.

If it passes the Senate, the flood insurance reform delay faces an uphill battle in the House where leadership has said it opposes the delay.

Now the bill also faces criticism from the White House, although the statement yesterday from the White House’s Office of Management and Budget (OMB) stopped short of threatening a veto.

The OMB said the Administration’s preference is that Congress retain the Biggert-Waters Flood Insurance Reform Act because delaying the reforms would add to the $24 billion deficit of the National Flood Insurance Program (NFIP). It urged Congress to find a way instead to target relief to “economically distressed policyholders.”

Sen. Mary Landrieu, D.-La., who has been one of the leaders in the fight to delay Biggert-Waters, took issue with the Administration’s position in a Tweet: “Admin position is short-sighted, misguided & irresponsible but will not deter our efforts.”

On the portion of the bill to establish a national registry of insurance agents and brokers, the Administration said it has problems with the background checks and appointment provisions.

The Biggert-Waters Flood Insurance Reform Act of 2012 requires the NFIP to set premium rates for properties to reflect true flood risk in order to make the program more financially stable.

On the flood insurance delay, the OMB said delaying implementation of these reforms would “further erode the financial position of the NFIP” and it would also “reduce FEMA’s ability to pay future claims” made by all policyholders.

“The Administration recognizes that many policyholders may be challenged financially by the new rates and remains committed to working with the Congress to develop approaches that ensure economically distressed policyholders are not unduly burdened while maintaining the financial stability of the NFIP,” the OMB said.

The Administration’s position tracks with recommendations from the General Accountability Office (GAO) in a recent report and insurance industry and tax groups but counters positions held by Senate Democrats.

The $1.1 trillion government funding agreement already signed by President Obama includes language to postpone for about eight months some of the flood insurance rate hikes triggered by reforms passed in 2012. The Senate bill would delay those and most of the remaining rate hikes for four years.

The Administration said it supports the policy goals of the section of S.1926 that would establish a National Association of Registered Agents and Brokers (NARAB). The bill would make it easier for agents and brokers to be licensed in states other than their own.

However, the Administration, said it is concerned that the NARAB bill provides a process for conducting criminal history records checks on individuals applying to become members of NARAB that is “inconsistent with the normal process” used by the FBI for background checks. The Administration said it believes the bill “can be made consistent with current law.”

In addition, the Administration said it has “constitutional concerns” with the requirement that the President reserve eight of the 13 positions on the NARAB board of directors for state insurance commissioners, which the statement said would appear to “significantly constrict the pool of individuals from which the President would be able to make those eight nominations” The statements said that this restriction appears to “impermissibly limit the scope of the President’s appointment power.” The Administration recommends that this requirement be amended to expand the size of the pool of potential appointees.

Topics Agencies Flood