The National Association of Mutual Insurance Companies (NAMIC) has praised the approval of reforms to the National Flood Insurance Program (NFIP) by the House Financial Services Committee.
NAMIC considered the changes a step in the right direction, and hopes that more could be done particularly on the issue of hidden subsidies.
The Flood Insurance Market Parity Act, HR 2901 was proposed by Rep. Dennis Ross, R-Fla. The reforms were intended to clarify rules for lenders when accepting private-sector flood insurance policies, opening the door for consumers to more options.
“The problems facing the National Flood Insurance Program have been exacerbated by the fact that it is, effectively, the only game in town,” said senior vice president of federal and political affairs for NAMIC Jimi Grande. “In allowing greater competition by private-sector companies, this legislation will provide consumers with more choices and a stronger overall flood insurance marketplace.”
“This legislation simply injects a measure of common sense to existing law, and NAMIC commends Congressman Ross for his leadership in working to address this issue,” Grande added. “While the challenges remain significant, this legislation is an important first step in the process of getting the NFIP onto a track toward fiscal sustainability.”
Next year, on September 2017, the NFIP is set to expire, giving the House Financial Services Committee time to come up with a better flood insurance program.
Grande underlined that lawmakers need to turn their attention to the issue of hidden subsidies responsible for keeping flood insurance rates far below the level of risk they are intended to cover, which gives policyholders an inflated sense of security.
“For too long, these hidden subsidies have kept the NFIP from reaching fiscal stability and have removed any incentive for homeowners and communities to better protect themselves from the threat of flooding,” remarked Grande. “Failing to recognize and address this problem undermines the potential benefits of bills like HR 2901, inhibits the ability of private companies to sell private flood coverage, and ultimately keeps the program as a drain on taxpayer money.”
