A short-term extension of the National Flood Insurance Program (NFIP) before its Sept. 30 expiration would lead to lapses and uncertainty in insurancing, housing and lending markets, the National Association of Insurance Commissioners (NAIC) said on Tuesday.
NAIC issued a release calling on Congress to reauthorize NFIP before its scheduled expiration and to pass the Flood Insurance Market Parity and Modernization Act, H.R. 1422 and S. 563. The measure would give states more flexibility to license and regulate private flood insurance and ensure that private flood insurance policyholders are treated the same as NFIP policyholders.
“It is important to maintain a stable program to provide certainty for policyholders while also encouraging greater growth in the private flood insurance market as a complement to the NFIP,” Ted Nickel, the president of NAIC and the insurance commissioner of Wisconsin, said. “State insurance regulators support this legislation because it provides consumers with more options for coverage which could lead to more affordable prices.”
The NAIC now requires that insurers’ annual reports include a line item for private flood insurance. That data will be passed on to state insurance regulators to gauge the reach of private flood insurance market and to provide insights into changing market trends.
“The NFIP plays a critical role in providing coverage and any delay or lapse in the program will hurt consumers,” Mike Consedine, the CEO of the NAIC, said. “The NAIC stands ready to work with Congress to support a long-term reauthorization.”