Senate legislation designed to foster greater growth in the private flood insurance market gained a new supporter this week. The Reinsurance Association of America announced it would be working with sponsoring Senators to pass S.B. 2381, a bill that would clarify the National Flood Insurance Act of 1968 by defining acceptable private flood insurance.
Frank Nutter, president of the Reinsurance Association of America, stressed that appetite for flood risk exists in the private markets and should be given greater chance to be realized.
“Reinsurers have an appetite to underwrite flood risk, and this legislation will facilitate the development of a private insurance market for flood risk,” Nutter said. “The RAA looks forward to working with Sens. Tester and Heller to advance this legislation in the Senate.”
According to sponsors, the 1968 bill intended to allow private insurers to provide acceptable flood insurance. However, lenders “unfortunately did not accept” private policies as meeting the definition under the law.
S.B. 2381, by contrast, will define “acceptable private flood insurance” and provide both businesses and homeowners with more options in their hunt for affordable flood insurance. Sponsors also hope the bill will eventually reduce the federal government’s debt through the National Flood Insurance Program.
While some private flood insurers have already waded into the market, like Gainesville, Florida-based The Flood Insurance Agency (TFIA) and Flood Zone Correction Inc., continued adjustments to the Biggert-Waters Act have made any lasting foray difficult.
“The [delay in premium increases] is squashing the appetite of the private market to come in and assist,” said Evan Hecht, CEO of TFIA. “I think that would be unfortunate because my belief is that the private market will not allow people to pay more than they should pay.”
The bill is being sponsored by Sens. Dean Heller and Jon Tester.
