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Flood insurance reform bill clears committee

Flood insurance reform bill clears committee
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A bill meant to reform flood insurance with a shot of private sector innovation unanimously cleared the House Financial Services Committee on Wednesday.

The bill, called the Flood Insurance Market Parity and Modernization Act, would make sure private flood insurance policies satisfy a federal mandate requiring coverage for high-risk homes and properties.

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Lawmakers said an influx of private sector plans could relieve pressure on the debt-riddled National Flood Insurance Program (NFIP), and passed the bill through the committee 53-0.

“No customer is going to be forced to buy another product, but at least they’ll have options,” Chairman Jeb HensarlingThomas (Jeb) Jeb HensarlingFed official defends moves on bank regulation, supervision Loss of Ryan hits hard for House Republicans Overnight Finance: Mulvaney asks Congress to retake power over consumer agency | Backs House in fight over Dodd-Frank rollback | Why Corker thinks tax cuts could be one of his 'worst votes' ever | House panel advances IRS reform bills MORE (R-Texas) said. “And ultimately it’s the options that create the price competition and the innovation and consumer protections."

Most U.S. flood insurance is issued through the NFIP, a federal provider that stayed mostly solvent for decades. Then came Hurricane Katrina and Superstorm Sandy, which saddled NFIP with $23 billion in debt.

Reps. Dennis RossDennis Alan RossLoss of Ryan hits hard for House Republicans The Hill's 12:30 Report GOP Rep. Ross won't seek reelection MORE (R-Fla.) and Patrick MurphyPatrick Erin MurphyWant to tie the NRA’s hands? Consider open primaries Lobbying World Flood insurance reform bill clears committee MORE (D-Fla.) introduced the bill in June 2015, but devastating December floods throughout the Midwest and Southwest pushed the committee to act.

Lawmakers on both sides were receptive to the bill, but Democrats withheld full support until certain consumer safeguards were added.

“Our regulators need authority to set necessary requirements on the financial strength of the products from private companies,” said Rep. Maxine WatersMaxine Moore WatersMaxine Waters asks Haley: Why suffer ‘endless humiliation’ with Trump? Overnight Finance: Mulvaney asks Congress to retake power over consumer agency | Backs House in fight over Dodd-Frank rollback | Why Corker thinks tax cuts could be one of his 'worst votes' ever | House panel advances IRS reform bills Mulvaney urges Congress to strip agency's powers MORE (Calif.), the committee’s top Democrat. She praised new language ramping up oversight, along with disclosures about coverage amounts and deductible levels.

The bill also had broad support from homebuilders, insurance companies and fiscal hawks, who said it would reduce spending and taxpayer risk while giving the housing and insurance industries clearer guidance.

If enacted, the bill would be but one step lawmakers say is necessary for flood insurance reform. Others include updating the Federal Emergency Management Administration (FEMA) flood mapping methods and investing more in disaster damage mitigation.

The NFIP is up for reauthorization in 2017, giving lawmakers a window to hone solutions.

“This committee has some serious work next year as it comes up for reauthorization,” Hensarling said. “But we can’t wait to help the people who use flood insurance. We can’t wait to help the taxpayers.”