PIA Supports Flood Bills Encouraging Development of Private Market

On September 30, the National Flood Insurance Program (NFIP)’s authority to operate was extended until December 3, 2021. This is the 17th short term extension of the NFIP since its last five-year reauthorization expired in 2017.

PIA supports a long-term reauthorization of the NFIP that recognizes the key role independent agents play in delivering the program to consumers and makes vital reforms to the program to ensure its solvency and effectiveness in the future.

Unfortunately, other than by including the short-term extension in the continuing resolution (CR) that was passed last month, the 117th Congress has shown little interest in reauthorizing the program. Behind the scenes, PIA has been engaged with congressional offices to focus their attention on the NFIP reforms we are prioritizing in any long-term reauthorization. Recently, several policymakers introduced NFIP-related bills designed to address their priorities with the hope that those provisions will ultimately be folded into a broader reauthorization package.

Two such bills, S. 2915, the Flood Insurance Consumer Choice Act, and S. 2913, the Removing Barriers to Private Flood Insurance Act, were recently introduced by Senator Rick Scott (R-FL) with PIA’s support. PIA has endorsed both bills, as they will reduce consumer obstacles to the growth of the private flood market.

The Flood Insurance Consumer Choice Act would amend the NFIP’s continuous coverage requirement by allowing former NFIP policyholders who have left the program and purchased a private flood policy to return to the NFIP without penalty. It would allow consumers whose private flood policies are cancelled, through no fault of their own, in the middle of a policy year, to return to the NFIP and purchase an NFIP policy at the same rate they had previously paid.

The Removing Barriers to Private Flood Insurance Act would permanently eliminate the NFIP’s Write Your Own (WYO) company non-compete clause, which arguably prohibits WYO companies from selling private flood insurance products that compete with NFIP products. While FEMA eliminated the non-compete clause via regulation in 2019, this bill would ensure it is not reinstituted and would legally prohibit FEMA from restoring it or imposing a similar non-compete clause. The bill would codify the elimination of the regulatory restriction that has historically prevented WYOs from selling both NFIP and private flood insurance policies.

As we continue to advocate for a long-term NFIP reauthorization and reform package, PIA will advocate for the inclusion of these provisions, along with our other NFIP priorities, to be included in any long-term reauthorization.