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Big “I” Provides Congressional Testimony on Private Alternatives to NFIP

Association submits testimony to insurance subcommittee regarding private flood policies. 

funkyAngleDome.gifWASHINGTON, D.C., Nov. 19, 2014 — The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) today submitted testimony before the U.S. House of Representatives Committee on Financial Services Subcommittee on Housing and Insurance at a hearing entitled, “Opportunities for a Private and Competitive Sustainable Flood Insurance Market.”
The hearing is set to discuss H.R. 4558, the “Flood Insurance Market Parity and Modernization Act of 2014,” by Reps. Dennis Ross (R-Florida) and Patrick Murphy (D-Florida). This proposal would increase the availability of private market flood insurance alternatives to the National Flood Insurance Program (NFIP) by having state insurance regulators determine acceptable private market flood insurance policies. Limited private flood insurance has been envisioned as working hand in hand with the NFIP since its inception in 1968 and, in fact, the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters) legislation specifically reiterated this fact. Unfortunately, there is a lack of clarity regarding exactly what is an “acceptable” private market flood policy. Currently, mortgage lenders are unsure of whether private market alternatives satisfy the “mandatory purchase” requirement and so are either requiring the private policy to look nearly identical to an NFIP policy or in many cases simply not accepting private policies. Additionally, federal banking regulators have begun the process for making a rule determining what is considered an “acceptable” private policy. This legislation would, appropriately, let state insurance regulators determine acceptable flood insurance policies instead of federal banking regulators or the lenders themselves.

”The Big ‘I’ shares the view of Reps. Dennis Ross (R-Florida) and Patrick Murphy (D-Florida) that state insurance regulators, and not federal banking regulators, should be the ones determining what is acceptable flood insurance coverage for consumers,” says Charles Symington, Big “I” senior vice president for external and government affairs. “We do have one potential concern regarding whether a private policy will count as ‘continuous coverage’ under the terms of the NFIP and look forward to working with the bill sponsors to address this concern.”

As H.R. 4558 is currently written, if an NFIP policyholder who either had a subsidy or a grandfathered rate elected to leave the NFIP and obtained a private market policy they would lose that subsidy and/or grandfather rate should they be displeased with the private market and decide to return to the NFIP. This loss would be permanent and would discourage consumers from utilizing any new private market opportunities. 
          The Big “I” testimony is available HERE. Additional information on the hearing is also available on the committee’s website.
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than a quarter of a million agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products. Web address:

​127 South Peyton Street
Alexandria VA 22314
​phone: 800.221.7917
fax: 703.683.7556

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