Bill Cuts Excessive Federal Insurance Regulations and Gives Power to the States to Create Robust Private Flood Insurance Market
WASHINGTON, D.C. – May 2, 2014 – (RealEstateRama) — U.S. Rep. Dennis Ross (FL-15) and U.S. Rep. Patrick Murphy (FL-18) introduced a bill that would encourage the development of a robust private flood insurance market that can offer homeowners options in terms of pricing and coverage. The Flood Insurance Market Parity and Modernization Act of 2014 would remove excessive restrictions placed on insurance companies by the federal government and would give states more flexibility to license and regulate private flood insurance.
Allowing private insurers to come into the government-dominated flood insurance market creates competition and results in better policies and pricing which will benefit homeowners. In addition, the innovations involved in that process will ultimately ensure that the National Flood Insurance Program (NFIP) is held accountable for its policies and practices.
“Floridians and Americans across the country would greatly benefit from more choices when it comes to flood insurance policies,” said Ross. “More choices can mean better coverage and cheaper policies for homeowners.”
“It’s great that the Florida Legislature just passed a bill that would create a state regulatory framework for private flood insurance companies to provide policies for homeowners,” Ross continued. “Today, Rep. Murphy and I introduced a bill in the U.S. House of Representatives that would remove the excessive restrictions that the federal government places on private flood insurance companies. This would allow states to be able to fully utilize their regulatory framework (like the one the Florida Legislature just approved) to license flood insurance policies. Together, these bills are a big win for homeowners.”
“With thousands of Treasure Coast-Palm Beach residents experiencing the uncertainty surrounding unaffordable flood insurance rate hikes, it became clear that there needs to be another game in town,” said Murphy. “This bill would get the federal government out of the way of letting Florida foster a competitive market to drive down costs for homeowners. This common sense measure would build on the good, bipartisan work done this year to provide desperately needed relief to middle class homeowners.”
Background regarding the need for Flood Insurance Market Parity and Modernization Act of 2014:
Section 239 of the Biggert-Waters Flood Insurance Reform Act of 2012 (“Biggert-Waters”) made clear that the intent of Congress was that private flood insurance should be an option available to homeowners. Biggert-Waters narrowly defined acceptable private flood insurance, thereby limiting the flexibility of state regulators to license private flood products.