Private flood insurance gains traction with victory in Congress

A bill designed to okay private flood insurance offerings nationwide received unanimous committee passage last week

Insurance News

By Lyle Adriano

The Flood Insurance Market Parity and Modernization Act has unanimously cleared the House Financial Services Committee Mar. 2. The bill, once enacted, would ensure that private flood insurance policies meet federal requirements for coverage for homes and properties at high risk of flooding.

According to news website thehill.com, lawmakers passed the bill through the committee uncontested at 53-0, agreeing that private sector plans could help ease the pressure on the overstretched National Flood Insurance Program (NFIP).

The NFIP issued most of the nation’s flood insurance policies, but Hurricane Katrina and Superstorm Sandy left the federal provider deep in debt at $23 billion.

“No customer is going to be forced to buy another product, but at least they’ll have options,” said committee chairman Jeb Hensarling (R-Texas). “And ultimately it’s the options that create the price competition and the innovation and consumer protections."

The bill was first introduced in June 2015 by Reps. Dennis Ross (R-Fla.) and Patrick Murphy (D-Fla.), however it was only after the severe flooding in parts of the Midwest and Southwest that occurred late December that the committee was pushed to act on it.

Democrats initially withheld full support for the bill until consumer safeguards were added.

“Our regulators need authority to set necessary requirements on the financial strength of the products from private companies,” remarked Rep. Maxine Waters (D-Calif.).

The bill enjoys broad support from homebuilders, insurance companies, and deficit hawks, as the bill would help reduce spending and taxpayer risk while providing the housing and insurance industries with proper direction.
 

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