Statement from John M. Huff - NAIC President and Missouri Insurance Director
Letter to Senators Harry Reid, Mitch McConnell, Tim Johnson and Richard Selby Regarding National Flood Insurance Program
On behalf of the National Association of Insurance Commissioners (NAIC), we write to express our support for the 'Flood Insurance Market Parity and Modernization Act (S. 1679/ H. R 2901)' to help facilitate the development of a private insurance market for flood insurance.
Floods are the most common natural disaster in the United States and all 50 states have experienced floods or flash floods in the past five years. State insurance regulators are keenly aware of the devastating effects floods have on constituents in our states and believe it is critical that flood insurance is available and affordable to protect homes, businesses, and personal property, providing peace of mind. Insurance consumers should have access to multiple options in order to find their preferred coverage and price, and facilitating increased private sector involvement in the sale of flood insurance will help promote these consumer choices and spur competition.
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.
On behalf of the National Association of Insurance Commissioners (NAIC), we write today regarding the joint notice of proposed rulemaking on Loans in Areas Having Special Flood Hazards Private Flood Insurance.