R Street Institute Commends Passage of H.R. 2901
Introduced by Reps. Dennis Ross, R-Fla., and Patrick Murphy, D-Fla., the bill is a necessary follow-up to the Biggert-Waters Flood Insurance Reform Act of 2012, clarifying Congress’ intent to encourage development of a private market in flood-insurance products to compete with the taxpayer-subsidized policies offered through the National Flood Insurance Program.
R Street Senior Fellow R.J. Lehmann noted that the expansion of the flood-insurance market has only become more necessary following a series of major catastrophes, including Hurricane Katrina and Superstorm Sandy. According to Lehmann, “The NFIP remains more than $20 billion in debt to U.S. taxpayers and has been on the nonpartisan Government Accountability Office’s list of high-risk federal programs since 2006. Prospects to shrink the program’s $1.1 trillion of total property exposure rely on the emergence of private-sector solutions.”
H.R. 2901 defers to the states’ expertise in insurance regulation to develop appropriate guidelines for qualifying policies, including those written through the excess and surplus lines markets. Additionally, it ensures that any period in which a property is covered either by an NFIP policy or a private policy is to be considered “continuous coverage.”
Passage of these commonsense adjustments and clarifications are important steps toward meaningful flood insurance reform and should be considered a victory for advocates of consumer choice and fiscal responsibility.