Flood insurance bill approved by House committee

The House Financial Services Committee approved legislation Wednesday that's designed to encourage private insurers to enter the flood insurance market.

The Flood Insurance Market Parity and Modernization Act — H.R. 2901 — holds that people who buy private flood insurance should receive the same treatment as those who purchase it through the National Flood Insurance Program if they're trying to obtain mortgages that require flood insurance.

Although private insurers already provide flood insurance for commercial organizations, insurers have shied away from underwriting homeowners.

The measure enjoys the support of much of the property/casualty insurance industry as well as free market groups.

“This bipartisan bill will remove unreasonable regulatory barriers that are hindering homeowners' flood insurance options,” committee Chairman Rep. Jeb Hensarling, R-Texas, said in his opening statement as the panel began consideration of the bill. “There is no doubt the National Flood Insurance Program is badly in need of reform. It is $23 billion in debt to taxpayers, it is unsustainable, and it hinders the development of a competitive private flood insurance market which would give homeowners more choices, lower costs and protect hardworking taxpayers from more bailouts.”