The Mortgage Bankers Association (MBA)
, has come out in support of newly introduced bipartisan legislation designed to expand flood insurance options in the private market.
In a letter to leaders in the Senate and House, the trade group announced its backing of S. 563 and H.R. 1422, both named the Flood Insurance Market Parity and Modernization Act. The MBA stated that these bills seek to address two lingering problems related to flood insurance in the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12): An unclear definition of what can be considered to be acceptable private flood insurance coverage and the uncertainty regarding the impact of private insurance on the product’s continuous coverage requirement.
"Prior to the enactment of BW-12, lenders were permitted to accept private flood insurance to meet the mandatory purchase requirement of the National Flood Insurance Reform Act of 1994," said MBA Senior Vice President of Legislative and Political Affairs Bill Killmer. "The BW-12 requirements have made it difficult for lenders to determine whether a private policy provides the necessary coverage under the definition. By allowing individual states to determine what constitutes acceptable private coverage, H.R. 1422 and S. 563 would add clarity to the current uncertainty amongst lenders in this regard."