Earlier this month, the House passed the Ross-Murphy bill, which would authorize state insurance commissioners to approve flood insurance policies for Freddie Mac, Fannie Mae, and other federally backed mortgages. The bill, co-sponsored by Reps. Patrick Murphy, (D-FL) and Dennis Ross, (R-FL) passed unanimously on a 419-0 vote.
During a debate on the matter, Rep. Edward Royce (R-CA) stated the “passage of this bipartisan bill means more consumer choice, more market competition and more product innovation. And consumers for the first time will be able to shop for a flood policy that fits their particular needs.”
The bill clarifies state insurance regulators as having the same discretion and authority used to regulate other insurance products and markets to regulate private flood insurance.
The Ross-Murphy bill would allow homeowners insured by the National Flood Insurance Program to switch to a private flood policy and retain the right to get their NFIP policy back again if they are dissatisfied with private insurance. The legislation essentially grandfathers a homeowner’s federal flood insurance rate provided there is no lapse in insurance coverage.
“I want to be clear that the issues surrounding flood insurance are difficult and complicated, and there are differences of opinion as to how much of a role private insurance can play. This bill threads that needle,” said Rep. Michael Capuano, (D-Mass,) during debate on the bill.
A similar private flood insurance bill, co-sponsored by Senators Dean Heller, R-Nev., and Jon Tester, D-Mont., is pending in the Senate Banking Committee.
During the House debate, Ross said the American Insurance Association, Mortgage Bankers Association, National Apartment Association, National Association of Realtors, National Multifamily Housing Council, National Taxpayers Union, and Reinsurance Association of America all support the legislation.
NAR President Tom Salomone has said that, “for many, the NFIP offers the only source of coverage that meets federally related mortgage requirements and protects properties in the 100 year floodplain.”