The U.S. House of Representatives unanimously passed H.R. 2901, known formally as the Flood Insurance Market Parity and Modernization Act, by a vote of 419-0 last Thursday. This is a very positive development for insureds, insurance agents and insurance carriers, because it provides much needed clarity on three important issues that have been holding back the development of the private flood marketplace:
- Lender Acceptance: If it becomes law, lenders will have clear authority to accept private market flood insurance as an acceptable alternative to National Flood Insurance Program (NFIP) flood insurance.
- Pre-FIRM Rates and Grandfathering: If it becomes law, it would eliminate the loss of pre-FIRM and grandfathered rating options, allowing insureds to be considered by FEMA to have maintained continuous insurance coverage if they leave the NFIP to buy private market flood insurance and then go back to NFIP later on.
- Regulation of Private Flood Insurance: If it becomes law, state insurance regulators will determine the specifics of acceptable coverage for private flood insurance sold by admitted carriers within their respective states.
The bill was sponsored by Reps. Dennis Ross (R-FL) and Patrick Murphy (D-FL) and aimed to clarify some provisions within previous legislation passed in 2012. Congressman Murphy is our local representative in the U.S. Congress and for several months we have been in communication with he and his staff about the legislation.
If you have any questions about this legislation or if you want us to help you find private market alternatives to NFIP flood insurance for your clients, please contact us. We would be pleased to help you.