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The House of Representatives on Tuesday voted 237-189 to pass the 21st Century Flood Reform Act (H.R. 2874) – a package of seven bills that reauthorizes the National Flood Insurance Program (NFIP) until 2022 and introduces various reforms.

The fate of the NFIP now rests with the Senate, which may adopt the House bill or a version of it, advance its own bill, or do nothing

There are a lot of good reforms in this bill for both taxpayers and ratepayers,” said House Financial Services Committee Chairman Jeb Hensarling (R-Tex.). “It is an absolutely revolutionary reform that we can break open the government monopoly and bring in market competition, innovation, more affordable rates for so many.”

Democrats said the measure would raise costs on low and middle income homeowners through higher premiums and surcharges and mean fewer people would buy flood insurance. They also warned it could trigger foreclosures in some high-risk, low-income areas.

Some of the reforms in the House bill seek to encourage more private flood insurers to enter the market; reduce costs from repetitive loss properties, improve flood mapping; cap annual premium increases and surcharges; continue the current practice of grandfathering certain properties from risk-based rates; and require the Federal Emergency Management Agency (FEMA), which administers the flood program, to share historic flood loss data with private insurers. Another provision would permit WYO insurance companies to also sell their own private policies, a practice now prohibited.

Other provisions would reduce the reimbursements to the private insurers involved in the WYO program; limit the premium on any residential property to $10,000 a year regardless of the property value; allow businesses to opt out of the flood insurance requirement after one year; and permit localities to create their own flood maps,

Hensarling stressed the need to mitigate the costs of repetitive loss properties. “We have to realize if we’re going to make this program sustainable we cannot have one percent of the properties causing 25 percent of the losses. Ultimately, if all we do is rebuild the same properties in the same fashion in the same location, that is neither wise nor compassionate,” said the congressman, who has announce he will not run for re-election.

The final House measure does not go quite as far in some ways as the original seven measures passed by Hensarling’s committee. To assure passage, Hensarling withdrew or amended several provisions including one that would have blocked NFIP from selling policies to homes valued at $1 million or more.

Please enjoy the full article below;

https://www.insurancejournal.com/news/national/2017/11/15/471159.htm

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