Insurance industry associations are applauding the draft Principles for Flood Insurance Reauthorization and Reform issued by the House Financial Services Housing and Insurance Subcommittee. These principles seek to serve as a guide for the upcoming legislative debate on the reauthorization of the National Flood Insurance Program (NFIP), which expires in September 2017.
The American Insurance Association, Property Casualty Insurers Association of America and SmarterSafer.org each came forward yesterday with a statement in support of the proposed reforms.
The American Insurance Association (AIA) said it is “encouraged by the draft principles.”
“AIA supports both the long-term reauthorization of the NFIP and expanding private sector insurance offerings,” said Tom Santos, vice president for federal affairs, in a statement. The draft principles “take constructive and positive steps toward both by providing marketplace stability, improving the NFIP’s fiscal position and fostering the development of private sector insurance options.”
“We applaud [House Financial Services Subcommittee Chairman Blaine] Luetkemeyer’s continued leadership on this issue, and we commend his and the committee’s efforts to begin the flood insurance reauthorization process early,” Santos said.
The Property Casualty Insurers Association of America (PCI) said it “commends” Luetkemeyer’s leadership and “strongly supports his pro-consumer [reform] principles,” according to a statement from Nat Wienecke, senior vice president of federal government relations.
“These thoughtful principles are an encouraging sign that Congress understands the importance of providing market stability through reauthorizing the NFIP well before the September 30, 2017 deadline.
“PCI strongly supports the committee’s commitment to consumer choice by facilitating more private sector participation in both the flood insurance marketplace and the NFIP. PCI appreciates and supports…Luetkemeyer’s goal to increase transparency for consumers in the NFIP’s rate-setting process, as well as reforms to place the NFIP on more sound fiscal footing,” Wienecke said.
SmarterSafer.org, a national coalition of taxpayer advocates, environmental groups, insurance interests, housing organizations and mitigation advocates, said the proposed reforms are “welcome steps toward making the program more sustainable while promoting private sector competition…[which] will give consumers access to better coverage and lower rates.”
“Rep. Luetkemeyer’s principles recognize that important structural reforms are needed to ensure the NFIP is financially secure and available to help Americans rebuild after future disasters. This includes better mapping and risk analysis, rate transparency, rates that reflect real risk, and additional and more flexible mitigation assistance,” the coalition said in a statement. “[The principles] also recognize the need to utilize reinsurance and capital market alternatives to protect the NFIP from large losses by diversifying risk across multiple markets.”
Source: American Insurance Association; Property Casualty Insurers Association of America; SmarterSafer.org