MBA, Trade Groups Up Pressure on Flood Insurance Fix
The Mortgage Bankers Association and other industry trade groups intensified their pressure on the House to pass a bill that would strengthen and expand the private flood insurance market.
In a Sept. 26 letter to House Speaker Paul Ryan, R-Wis., and Minority Leader Nancy Pelosi, D-Calif., MBA and more than a dozen industry trade groups expressed support for the “Development of a Private Flood Insurance Market” provision of H.R. 3823, the Disaster Tax Relief and Airport and Airway Extension Act of 2017. The provision, introduced by Reps. Dennis Ross, R-Fla., and Kathy Castor, D-Fla., would increase acceptance of private flood insurance products as a fix to the Biggert-Waters Flood Insurance Reform Act of 2012
“This will increase flood insurance options for consumers, thereby providing more competition and coverage options to families and businesses,” the letter said.
The Ross-Castor language passed the House last year by a 419-0 vote after being unanimously forwarded by the House Financial Services Committee in June (58-0). It would clarify federal law intended by Congress to allow lenders to accept private flood insurance in lieu of federal coverage to satisfy the mandatory purchase requirement.
“[We] strongly support inclusion of the bipartisan Ross-Castor language in the Disaster Tax Relief and Airport and Airway Extension Act of 2017 that allows consumers the choice of government or private flood insurance coverage,” the letter said. “We ask for you to vote in favor of this important legislative package when it is considered by the House of Representatives.”
Earlier this week, MBA sent a separate letter to the Hill, urging support of the bill, noting that Biggert-Waters, while well-intended, produced unintended consequences that negated its effectiveness.
“The BW-12 requirements have made it difficult for lenders to determine whether a private policy provides the necessary coverage under the definition,” MBA said. “With the risk of federal liability for accepting less than an NFIP policy, lenders have (to date) been reluctant to accept private policies.”
The Ross-Castor provision clarifies that continuous coverage by private flood insurance satisfies any statutory, regulatory or administrative continuous coverage requirements. “By clarifying that private coverage satisfies the continuous coverage requirement, these provisions will help to make these policies a more viable option for consumers,” MBA said.
Joining MBA in the joint letter: the Property Casualty Insurers Association of America; the Reinsurance Association of America; the National Multifamily Housing Council; the National Apartment Association; the American Bankers Association; the Council of Insurance Agents and Brokers; the American Insurance Association; the National Association of Realtors; the National Association of Professional Insurance Agents; the Financial Services Roundtable; the Independent Insurance Agents & Brokers of America; the National Association of Mutual Insurance Companies; the Independent Community Bankers of America; and the National Association of Federally Insured Credit Unions.
The bill is on the current House floor agenda.
