TheU.S. House of Representatives unanimously passed a bill intended to open upmarkets to private flood insurance.
H.R.2901, the Flood Insurance Market Parity and Modernization Act, passed 419-0 onApril 28 after a couple of days of delayed floor votes.
Thelegislation clarifies that private flood insurance should be an option forconsumers by tweaking the Biggert-Waters Flood Insurance Reform Act of 2012. Itdoes so by making clear that private flood policies meet mandatory purchaserequirements under the National Flood Insurance Program. Surpluslines providers have been said to be eager to get into the market, possiblypaving the way for traditional property and casualty insurers.
TheHouse legislation was sponsored by Rep. Dennis Ross, R-Fla., and Rep. PatrickMurphy, D-Fla.
Rep.Ed Royce, R-Calif., noted in remarks on the House floor on April 26 that sinceit began in 1968, the National Flood Insurance Program was never intended tocover flood insurance policies if the private sector was able and willing toparticipate in covering the risk.
"Passageof this bipartisan bill means more consumer choice, more market competition,and it means more product innovation. Consumers for the first time will be ableto shop for a flood policy that fits their particular needs," Royce said.The flood bill was expected to be up for a vote at earlier junctures this week.
"Thisbill also has the added benefit of decreasing the aggregate flood insuranceexposure to the federal government and decreasing the potential for a futuretaxpayer backed bailout," Royce said in an emailed news release.
Catastrophessuch as Hurricane Katrina and Superstorm Sandy, coupled with the $20billion-plus debt of the NFIP and its $1.1 trillion of total property exposuremake it necessary for the flood insurance market to grow, noted senior fellowR.J. Lehmann of the R Street Institute in a news release.
Insurerspraised the Congressional action. Nat Wienecke, the Property Casualty InsurersAssociation of America's senior vice president of federal government relations,urged the U.S. Senate to take up the legislation next.
"Thisis the right time to pass this legislation. Families and businesses depend onflood insurance to protect their homes, and H.R. 2901 may expand consumers'flood insurance options," Wienecke said in a news release.
TheAmerican Insurance Association said the bipartisan vote will give momentum toanticipated action in the Senate. The companion bill in this chamber is S. 1679.
Thebill passed the House Financial Services Committee on March 2.