The House Financial Services Committee [1] unanimously passed a bill this week that lifts certain restrictions placed on insurance companies by the federal government and gives states more flexibility to license and regulate private flood insurance.
The H.R. 2901, the Flood Insurance Market Parity and Modernization Act, [2] authorizes state insurance commissioners to approve flood insurance policies for Fannie Mae, Freddie Mac, and other federally-backed mortgages. In addition, the bipartisan bill encourages the development of a robust private flood insurance market that offers homeowners more pricing and coverage options.
The bill is co-sponsored by Reps. Dennis Ross (R-Florida) and Patrick Murphy (D-Florida) and passed on a 419-0 vote.
Ross stated in his House floor speech [3]that regulatory restrictions along with the bias of regulators favoring National Flood Insurance Program (NFIP) policies have prevented the development of a private flood insurance marketplace, and this was "an unintended consequence."
“While the NFIP is limited in what its policies cover, the private sector is not. The private sector is also in a better position to provide stronger incentives for property owners to invest in mitigation and resiliency. Ultimately, this increased emphasis on mitigation will benefit homeowners and taxpayers alike," he said.
Although the bill is specifically for Florida homeowners, Ross stated that homeowners all over the U.S. could benefit from flood insurance reform.
“Floridians and all Americans across the country would greatly benefit from more choices when it comes to flood insurance policies, and private competition in this market will lead to greater innovation and more affordable and comprehensive policies for consumers," Ross stated.
Murphy added, [4] “This bill is a win-win for Florida families, giving them more options for flood insurance coverage and bringing down the cost of policies. It was great to see our legislation pass with unanimous support, and I urge the Senate to swiftly follow suit.”