Filed Under:Agent Broker, E&S/Specialty Business

Time to act on flood bill


Rowdy the dog finds refuge on an office chair in Harvey Cook's flooded home in Hammond, La., Friday, March 11. (Photo: Scott Threlkeld/AP Photo)
Rowdy the dog finds refuge on an office chair in Harvey Cook's flooded home in Hammond, La., Friday, March 11. (Photo: Scott Threlkeld/AP Photo)

On April 28, 2016, the U.S. House of Representatives passed the Flood Insurance Market Parity and Modernization Act (H.R. 2901) on a 419–0 vote.

NAPSLO strongly supports this legislation because it makes clear to lenders that they may accept private flood insurance solutions just as they had prior to the Biggert-Waters Act of 2012. We believe it is critical that surplus lines insurers are eligible to offer private market solutions and alternatives to consumers with unique and complex flood risks.

More consumer choice

This bipartisan legislation encourages competition and will provide more consumer choice, which is a win for the insured and the National Flood Insurance Program (NFIP).

Surplus lines insurance, often called the “safety valve” of the industry, is used to cover risks that are difficult to place because they exceed what the standard market is either capable of or willing to underwrite. Flood insurance is part of a broad range of risks for which the standard market may be unable to provide the level of coverage a consumer needs.

NAPSLO member surplus lines insurers and brokers are specialists who create innovative products and deliver customized and cost-effective solutions to meet the insurance consumer's specific needs.

Since well before the Biggert-Waters Act of 2012, surplus lines flood insurance policies have been underwritten generally as a supplemental option for insureds seeking flood insurance coverages in excess of the capacity of the NFIP or where the NFIP was unavailable. It's important to note that surplus lines insurers underwrite private insurance flood policies primarily in commercial lines and, to a limited degree, in personal lines.

Preserves supplemental coverage options

The Flood Insurance Market Parity and Modernization Act is intended to preserve the surplus lines market's ability to provide supplemental coverage options that exceed or differ from the options available through the NFIP or the standard market.

Generally speaking, consumers require alternatives to the NFIP when they need higher limits than the $250,000 residential, $100,000 personal contents and $500,000 commercial limits offered by the NFIP; coverage that is enhanced such as replacement cost rather than the actual cash value, or the ability to schedule multiple properties on one policy; or additional coverage such as additional living expense, basements, or business interruption.

NAPSLO had the opportunity to testify in support of H.R. 2901 before the House Financial Services Subcommittee on Housing and Insurance in January, and NAPSLO has worked alongside industry partners to meet with Congress to voice our support for both H.R. 2901 and S. 1679. The next step in this process is for the Senate to consider the legislation.

Will Senate take up House version?

The original version of H.R. 2901 mirrored legislation filed in the Senate by Sen. Dean Heller (R-Nev.) and Sen. Jon Tester (D-Mont.) as S. 1679. The House version was modified slightly, and we hope that the Senate will take up this House version as it considers the issue.

I urge the Senate to act quickly on this important issue to preserve the ability of surplus lines insurers to provide supplemental flood insurance and to ensure that consumers are able to access appropriate flood coverage.

For more information about the surplus lines industry, including information related to H.R. 2901 and S. 1679, visit

Brady Kelley serves as the executive director of NAPSLOOpinions expressed are his own.


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