Flood insurance reform passes first hurdlePosted On: Mar. 13, 2016 12:00 AM CST
Supporters of federal flood insurance legislation look for Congress to follow a House panel's lead and approve a bill that would put private insurers on an even footing with the National Flood Insurance Program.
The House Financial Services Committee earlier this month unanimously approved the Flood Insurance Market Parity and Modernization Act.
The measure, sponsored by Reps. Dennis Ross, R-Fla., and Patrick Murphy, D-Fla., holds that people who try to get a mortgage should receive the same treatment if they buy flood insurance from the private market as those who buy it through the National Flood Insurance Program.
“There is no doubt the National Flood Insurance Program is badly in need of reform,” House Financial Services Committee Chairman Jeb Hensarling, R-Texas, said in support of H.R. 2901 before the vote.
“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,” he said in a statement.
The bill, which was sent to the full House, enjoys wide support from the property/casualty insurance industry.
A similar bill, which like H.R. 2901 would apply primarily to homeowners since private insurance already exists for commercial buyers, has been introduced in the Senate. But S. 1679 has not yet received a hearing.
Advocates of privatization of flood insurance believe the House committee vote could spur Senate action.
“House actions are seldom a predictor of Senate priorities,” said Joel Wood, senior vice president of the Council of Insurance Agents and Brokers in Washington. Still, “the unanimous bipartisan support of Ross-Murphy in the Financial Services Committee bodes well.”
Mr. Wood noted that “a truncated presidential election year is a challenge.” In addition, the “fact that any one senator can gum up the works is always a problem when you're trying to get something enacted.”
“We feel momentum, and we're going to work it hard,” Mr. Wood said.
“Hopefully, the vote in the House could create some momentum for the Senate to act,” said Tom Santos, a vice president at the American Insurance Association in Washington.
If the full House follows the committee's lead, “I think the odds are pretty good as long as we have a bipartisan bill going forward, which is what we have today,” he said.
“It's pretty remarkable a committee of Congress has unanimously passed a bipartisan bill, and that's to be commended,” said Frank Nutter, Washington-based president of the Reinsurance Association of America.
It reflects a desire on the part of Democrats and Republicans to encourage and create incentive for a private market for flood insurance.
“Anytime you have a vote coming unanimously out of committee, that bodes very well, said Nat Wienecke, senior vice president of the Property Casualty Insurers Association of America's Washington office.
“We're optimistic this bill will be considered under suspension of the rules, which is reserved for noncontroversial measures. We're hopeful there will be time on the calendar as Congress figures out the budget and appropriations process that there will be time to bring this bill up in short order,” he said.
“If the House has an overwhelming vote, that makes the senate process that much easier to go through,” he said