It was introduced as the House firmed up plans to vote on its extension legislation, the Flood Insurance Reform Act of 2011, H.R. 1309, either next week or the week after, according to several industry officials.

"The fundamental idea in this bill solves one of the major quandaries facing the nation's current coastal insurance system," says Eli Lehrer, the Heartland Institute's vice president for Washington, D.C. operations.

"The current haphazard system for allocating claims between NFIP and wind insurers often leaves everyone involved worse off," Lehrer says. "This bill holds out the possibility of developing a fair, equitable system that serves everyone's interest. It's not perfect, but given that the system proposed is optional and will not require a meaningful commitment of tax dollars, it certainly seems like a worthwhile experiment."

But officials of the National Association of Mutual Insurance Companies (NAMIC) voiced concerns. "We appreciate Sen. Wicker's willingness to address this complicated issue and look forward to working with him to find a solution that works for everyone," says Matt Gannon, assistant vice president of federal affairs for NAMIC. "However, we have some concerns that his plan could cause more confusion for insurers and consumers in the aftermath of a major flood."

The bill would create a "standardized loss-allocation" system to distribute losses between the National Flood Insurance Program and private or residual-market-provided wind insurance following the total loss of any property that carries both flood and wind insurance.

The Wicker bill would utilize data currently collected by the National Oceanic and Atmospheric Administration, academic institutions and private entities to allocate wind-vs.-water damages following significant storms.  Using a post-storm event formula developed under the Wicker bill, damage would be determined by its source and attributed to wind or water peril, Wicker says. 

 The formula would be applied on a property-by-property basis so individual engineering characteristics of each home would be taken into account, he notes.

"This would allow accurate insurance settlements when no tangible evidence remains after a hurricane," Wicker says.