House Committee Passes Five-Year NFIP Renewal

On Wednesday, the U.S. House Financial Services Committee marked up legislation to reauthorize the NFIP for five years. The legislation, H.R. 3167, was part of a bipartisan package by Chairwoman Maxine Waters (D-California) and Ranking Member Patrick McHenry (R-North Carolina) to provide certainty and strengthen the NFIP. In a rare moment of bipartisan comity, the committee passed the legislation by a unanimous vote of 59-0 giving it huge momentum before House floor consideration.

First and foremost, the legislation provides certainty to the NFIP by reauthorizing it for five years. Since 2017, the NFIP has seen numerous lapses which have significantly impacted consumers, small businesses and real estate markets in addition to undermining confidence in the program. The Big “I” is pleased to see a long-term extension included in the legislation.

The legislation also includes language clarifying that private flood insurance can satisfy the NFIP’s continuous coverage requirements, which ensures that if consumers leave the NFIP for the private market and choose to return to the NFIP, they can do so without penalty. This continuous coverage fix has been a top Big “I” priority and we advocated for it to be included in the package. Another Big “I” priority included in the legislation is language providing refunds of unearned premiums for mid-term cancellations of NFIP policies in favor of private policies.  Also noteworthy is what is not in the legislation as the bill approved by the committee does not include a reduction to the Write Your Own (WYO) reimbursement rate which is used by WYO insurers to pay NFIP agent commissions amongst other expenses. The Big “I” has continually defended agent commissions as part of the NFIP deliberations.

Additional reforms in the package include assistance programs for low-income policyholders, repeal of surcharges, a monthly installment premium payment system, and mapping and mitigation programs. Please see a section-by-section summary of H.R. 3167 here.

In addition to H.R. 3167, the committee also passed H.R. 3111 by Rep. Nydia Velazquez (D-New York), which would reform the claims process by seeking to provide clarity to NFIP policy terms in addition to reforming the appeals and litigation process.

The Big “I” thanks Chairwoman Waters and Ranking Member McHenry for their leadership on the bipartisan NFIP legislation. The Big “I” looks forward to continuing to strengthen the NFIP and hopes to see the legislation advance in the U.S. House of Representatives. 

Joseph Cortina is Big “I” director of federal government affairs