House Passes MBA-Supported Flood Insurance Provision

The House yesterday passed a bill containing Mortgage Bankers Association-supported language that would strengthen and expand the private flood insurance market.

The language, part of H.R. 3823, the Disaster Tax Relief and Airport and Airway Extension Act of 2017, would increase acceptance of private flood insurance products as a fix to the Biggert-Waters Flood Insurance Reform Act of 2012. The provision, introduced by Reps. Dennis Ross, R-Fla., and Kathy Castor, D-Fla., had broad bipartisan support. The Ross-Castor provision clarifies that continuous coverage by private flood insurance satisfies any statutory, regulatory or administrative continuous coverage requirements.

“MBA commends the House of Representatives for passing bipartisan legislation that includes language aimed at increasing flood insurance options for consumers,” said MBA President and CEO David Stevens, CMB. “We now ask the Senate to follow suit and pass this bipartisan private flood insurance language in the Disaster Tax Relief and Airport and Airway Extension Act of 2017. MBA looks forward to continuing to work with all policymakers to protect consumers by providing them with the choice of government or private flood insurance coverage.”

MBA and other industry other industry trade groups lobbied the House hard this week in anticipation of a vote. 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 flood insurance language.

“This will increase flood insurance options for consumers, thereby providing more competition and coverage options to families and businesses,” the letter said.

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.”