On June 12th, the U.S. House Financial Services Committee passed PIA-supported bipartisan legislation to reform the National Flood Insurance Program (NFIP) and reauthorize it for five years. The compromise bill was released June 6 by House Financial Services Committee Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC). The NFIP is currently slated to expire on September 30, 2019 and is on its 12thshort term extension since 2017. See PIA National’s press release here.
The Waters-McHenry legislation recognizes and preserves the critical role of the independent agent, provides continuous coverage protection to policyholders who leave the NFIP to purchase a private flood policy and return to the program, makes important investments in mitigation, and increases funds for mapping. In addition, the bill maintains grandfathering and the gradual implementation of actuarially sound rates.
Notable for PIA members is the absence of any provision that would impede the ability of independent agents to be fairly compensated for their work on the notoriously complicated flood program. Such a provision was included in legislation that passed the House last Congress. PIA National opposed the 2017 legislation over that provision and, since then, has led the effort to encourage policymakers to maintain agent compensation in the NFIP legislation passed by the committee today. We will continue to be vigilant as the NFIP legislation moves to the House floor, and the process continues in the Senate.
Another bill to reform the NFIP, the National Flood Insurance Program Administrative Reform Act, sponsored by Rep. Nydia Velazquez (D-NY), was also considered and passed by the committee. PIA supports this legislation, as it includes many of the priorities PIA National has been advocating for, like making common-sense reforms to the policyholder appeals procedure, improving aspects of the claims process, creating a Federal Flood Insurance Advisory Committee with insurance agent representation, and strengthening disclosure requirements included in standard flood insurance policies.
PIA National is urging the full House to swiftly pass both bills, which may be merged into one NFIP reauthorization package. The Senate should then also pass this bipartisan agreement.