NAMIC Opposes Senate Legislation Aimed at Reforming Flood Program

The National Association of Mutual Insurance Companies today expressed strong opposition to legislation unveiled in the Senate designed to reauthorize and make changes to the National Flood Insurance Program.

The legislation, the National Flood Insurance Reauthorization Act of 2019, takes a significant departure from the bipartisan bill that the House Financial Services Committee advanced last month on a unanimous 59-0 vote. The Senate legislation is a huge step backward and puts the program’s reauthorization in jeopardy.

“The goal of any reforms to the program should be to increase competition and seek to match rate to risk as closely as possible – without movement toward those two objectives, the program will continue to depend too greatly on America’s taxpayers,” said Jimi Grande, NAMIC’s senior vice president of government affairs.

“Cutting the Write-Your-Own reimbursement rates as the new proposed NFIP reauthorization bill seeks to do would harm consumers and reduce competition and choice in the marketplace,” Grande continued. “It ignores some of the most obvious needs for reform and instead would drive more companies out of the program. If they are not even able to cover the costs of selling and servicing NFIP policies then you can expect them to stop doing it, following the dozens of companies that have fled the WYO program since 2000.”

The National Flood Insurance Program insures more than 5 million Americans against the risk of flooding. Without WYO companies participating in the program, policyholders shopping for flood insurance would have one option: purchasing policies and receiving customer service through the Federal Emergency Management Agency. FEMA has set a “moonshot” goal of doubling the number of Americans insured against the risk of flood by 2022.

“While FEMA has a laudable goal of increasing the take-up rate, this legislation would make that impossible as it would collapse the NFIP’s most important distribution channel,” said Grande. “If the goal is to reduce policyholder choice, drastically reduce the take-up rates for NFIP policies, and thereby reduce the program’s overall fiscal stability, then, sadly, this bill accomplishes that.”


Lisa Floreancig
Senior Director of Communications