Virtual Hearing- Reauthorization and Reform of the National Flood Insurance Program (EventID=114847)

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Connect with the House Financial Services Committee Get the latest news: https://financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/HouseFinancialCmte Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Wednesday, May 25, 2022, at 12:00 p.m. (ET) Housing, Community Development and Insurance Subcommittee Chairman Cleaver and Ranking Member Hill will host a virtual hearing entitled, “Reauthorization and Reform of the National Flood Insurance Program." - - - - - - - - Witnesses for this one-panel hearing will be: • Carolyn Kousky, Executive Director, Wharton Risk Center • Karen McHugh, Missouri State NFIP Coordinator • Ariel Rivera-Miranda, Founder and Agency Principal, Deer Insurance • Roy Wright, President & CEO, Insurance Institute for Business and Home Safety • Franklin W. Nutter, President, Reinsurance Association of America Background Prior to 1950, flood insurance was a peril often included in standard homeowners’ insurance policies. However, in response to increasing frequency and severity in flood-related losses in the 1950s, insurance companies began excluding flood insurance coverage and selling it separately. By the 1960s, widespread flooding along the Mississippi River caused most private insurers to flee the business of flood insurance altogether, leaving many homeowners vulnerable with virtually no access to private flood insurance. The lack of availability of flood insurance also left the public vulnerable to bearing the costs of flood damage through post-disaster relief funding. In direct response to this private market failure, the National Flood Insurance Program (NFIP) was created in 1968 with the passage of the National Flood Insurance Act (NFIA). In doing so, Congress determined that “as a matter of national policy, a reasonable method of sharing the risk of flood losses is through a program of flood insurance which can complement and encourage preventive and protective measures” and that transferring the costs of private property flood losses from the general taxpayer to individuals in the floodplains through premiums would ease the strain on the nation’s limited disaster resources. Congress also passed the Flood Disaster Protection Act of 1973 (FDPA) that requires most property owners in a designated Special Flood Hazard Area to purchase flood insurance. The last long-term reauthorization of the NFIP occurred when Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12), which was subsequently amended by the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA). Since the end of fiscal year (FY) 2017, the NFIP has the property, policyholders have the option of obtaining excess flood insurance in the private market if such coverage is available. People living in SFHAs can also satisfy the mandatory purchase requirement by purchasing private insurance. 14 In response to concerns that there was ambiguity as to which private policies would meet the mandatory purchase requirement, multiple agencies issued joint guidance in 2019 to provide some clarity... Hearing page: https://financialservices.house.gov/events/eventsingle.aspx?EventID=409381