With the House Financial Services Committee's passage of H.R. 2901, the Flood Insurance Market Parity and Modernization Act, there is optimism that the industry-supported measure has a good chance to become law, and perhaps sooner rather than later.
The bill essentially clarifies language in the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) regarding the ability of privately issued Flood insurance to meet lenders' mandatory purchase requirements. Tom Glassic, vice president of policy and government relations for the Chicago-based Property Casualty Insurers Association of America, says when BW-12 was originally reported out of the House, it specified that lenders shall accept private Flood insurance for mandatory purchases.
Later in the process, language was added defining private Flood insurance. Glassic says it defined private Flood insurance by referencing "some rather specific details that are in an NFIP [National Flood Insurance Program] policy that are completely valid consumer protection items you see in state law on a regular basis; they just didn't have any place in federal law." This language, he says, led to confusion among lenders evaluating policies for the purpose of mandatory flood insurance requirements.
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