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3/1/2016
Flood Insurance Market Parity and Modernization Act (H.R. 2901)

While the Biggert-Waters Flood Insurance Reform Act of 2012 affirmed Congress's intent that lenders can accept private flood insurance as an alternative to the National Flood Insurance Program (NFIP), the definition and prescriptive conditions have created a significant obstacle impeding the development of a private market. At this time, the private flood market remains relatively small, but the clarifications included in this legislation will assist in removing any unintended barriers to help prompt more insurers to enter this market if they are willing. Facilitating the entry of additional carriers into the market will provide consumers with access to additional options for flood insurance products, and already we have seen some examples where a private carrier is willing to offer comparable coverage at a lower cost than the NFIP. Over time, this additional competition and shift of risk from a federal program to the private market could help lessen the exposure of U.S. taxpayers to the types of catastrophic flood losses that now reside as unpaid debt on the NFIP's books.