The embattled US National Flood Insurance Program (NFIP) is one step closer to being given the tick of approval to continue for another five years despite a $US17.75 billion ($16.3 billion) black hole in its accounts.

Although the Congressional Financial Services Committee has approved legislation to reform flood insurance, there are still several hurdles ahead, with the bill needing to pass through Congress and the Senate.

The Insurance, Housing and Community Opportunity Subcommittee also approved the bill last month.

Chairman Judy Biggert says the program is in “deep financial trouble” and the bill will place it back on a sound footing by phasing in actuarially sound rates.

She says the legislation also addresses a broad range of concerns about new maps, as well as dams and levees.

“Together these reforms will help ensure reliable protection for homeowners and businesses while shifting the burden of risk off American taxpayers,” Ms Biggert said.