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WASHINGTON — The Flood Insurance Market Parity and Modernization Act of 2014 would clarify that private flood insurance, rather than only the policies issued by the National Flood Insurance Program (NFIP), meets the mandatory purchase requirements of lenders, according to Business Insurance.
Bill sponsors, Senators Jon Tester, D-Montana, and Dean Heller, R-Nevada, indicated that the drafters of the original National Flood Insurance Act of 1968 intended for private insurers to participate in the market, the article stated.
"Unfortunately, due to a lack of clarity in existing law, lenders have not accepted private flood insurance as meeting mandatory purchase requirements," according to a statement from Senator Heller's office.
"This straightforward clarification to our nation's flood insurance market will encourage private-sector participation, increase competition and give consumers more options when shopping for policies," Senator Tester said in a separate statement.
According to the article, the bill comes at a particularly opportune time when the National Flood Insurance Program is about $25 billion in the red.
Encouraging private insurers to enter the flood insurance market is about the only way flood insurance will remain widely available, the article noted.
Click here to read the article in its entirety.