Trade Groups Rally for Private Flood Insurance Legislation

Trade Groups Rally for Private Flood Insurance Legislation

July 18, 2017
CoreLogic has updated its residential loss estimates for Hurricane Harvey, placing the estimated insured flood loss for homes in the 70-county area in Texas and Louisiana affected by the storm between $6.5 billion and $9.5 billion
A coalition of housing and financial services trade associations is calling on Congress to support legislation to redefine the role that private flood insurance policies play in regards to the National Flood Insurance Program (NFIP).
In a letter to congressional leaders citing their support of the Flood Insurance Market Parity and Modernization Act (S. 563 and H.R. 1422), the trade groups noted the legislation reaffirms the value of private sector flood insurance policies while rectifying the confusion created in the Biggert-Waters Flood Insurance Reform Act of 2012 regarding the definition of "private flood insurance." The trade groups said the language in the Biggert-Waters Act discouraged lenders from accepting private flood insurance policies.
"S. 563 and H.R. 1422 may serve as first steps to achieving wider availability of private market flood insurance," the trade groups wrote. "Under current NFIP rules, policyholders can permanently lose access to their current NFIP rates if they leave the NFIP and opted to obtain coverage with a private flood insurance policy. This has created a disincentive for consumers to choose a private policy in lieu of the NFIP and thwarts congressional intent to allow the consumers the choice to seek better or more affordable coverage from a robust private flood insurance market. By clarifying that private coverage satisfies the continuous coverage requirement, S. 563 and H.R. 1422 will help to make these policies a more viable option for consumers."
The trade groups supporting the legislation included the American Bankers Association, the American Insurance Association, the Association of Bermuda Insurers and Reinsurers, the Council for Affordable and Rural Housing, the Council of Insurance Agents and Brokers, the Financial Services Roundtable, the Independent Insurance Agents and Brokers of America, the Mortgage Bankers Association, the National Affordable Housing Management Association, the National Apartment Association, the National Association of Housing Cooperatives, the National Association of Mutual Insurance Companies, the National Association of Professional Insurance Agents, the National Association of Professional Surplus Lines Offices, the National Association of Realtors, the National Multifamily Housing Council, the Property Casualty Insurers Association of America, and the Reinsurance Association of America