Private Flood

Federal Definition of Private Flood Insurance

The Flood Insurance Market Parity and Modernization Act was first introduced in 2014 by Rep. Ross and then Congressman Patrick Murphy (D-FL) and Senators Heller and Tester (S. 563) in 2014 and again in 2015 and 2016. In 2017, Representative Kathy Castor (D-FL) replaced Rep. Murphy as a cosponsor with Mr. Ross after Mr. Murphy left Congress (H.R. 1422). Since 2014, the Association has strongly supported this legislation that will revise the federal definition of private flood insurance. Revisions are necessary to amend the current definition to ensure eligible surplus lines and other private insurers private market solutions and alternatives are available to consumers in need of unique and complex flood risks and that the policies are accepted by lenders. 

WSIA works in coalition with other trade association to help Congress understand the importance of the changes proposed in the bill and that the changes are necessary to relieve the confusion caused by the Biggert-Waters Act of 2012 (BW12). BW12 encourages participation from the private market as an alternative or supplement to the NFIP, but the definitions used have created confusion and uncertainty for lenders accepting the products. The proposed legislation will incorporate NRRA-compliant language as part of the proposed revised definition and provide appropriate guidance to the lending community on the acceptance of private market flood insurance to fulfill the mandatory purchase requirement when an individual or company seeks a federally-backed mortgage.

Tied to this legislation is the reauthorization of the National Flood Insurance Program (NFIP), originally set to expire on September 30, 2017. On September 26, Congress agreed to reauthorize the NFIP for three months, until December 8, 2017. The short-term reauthorization was done in conjunction with providing emergency aid to the states impacted by Hurricanes Harvey, Irma and Maria. In 2018, after Hurricane Michael and other flooding events, the program did not receive any additional funding or debt forgiveness, and at this time, has approximately $10 billion left in borrowing authority, if needed.  

Since the scheduled expiration of the program on September 30, 2017, the NFIP has received ten short-term reauthorizations to December 8, December 22, January 19, February 8, March 23, July 31, November 30, December 7, December 21 and May 31, 2019. Until March 23, the extensions were tied to the federal budget process, resulting in less focus on the reform of the program as Congress worked through the overall budget process. However, on March 23, Congress decoupled the NFIP reauthorization from the budget omnibus bill and extended the program to July 31, 2018. On July 31, Congress approved an additional four-month extension to November 30, 2018, when it extended the program for one week to December 7, then again to December 21. With these last two short-term extensions, the NFIP once again became connected to the budget process; however, in an effort to ensure the program did not lapse as tensions grew surrounding the budget and a likely shutdown, the NFIP was separated from the budget and extended to May 31, 2019. 

After Congress and the President failed to agree on a budget by December 21, the federal government experienced a partial shutdown.  On December 26, FEMA announced its determination that the NFIP is unable to use the National Flood Insurance Fund for any purpose other than to pay the costs incurred in the adjustment and payment of any claims for losses on existing policies in force prior to the lapse in its appropriation. Therefore, even though Congress extended the NFIP, FEMA determined that it was not authorized to sell new policies or renew policies in the absence of an appropriation. However, late the the evening of December 28, FEMA rescinded its December 26 guidance, noting that NFIP insurers could resume the sale, renewal and monetary endorsements for flood insurance policies and to treat the program as operational since December 21, 2018 without interruption.  

While the House approved a comprehensive flood reform plan in 2018, which included H.R. 1422, among a number of other broad program reforms, the Senate did not take action on the legislation or the reform measures similar to the House package. With the 115th Congressional Session and will need to refiled in the 116th Congressional Session coming to an end, the legislation has died and will now need to be refiled in the 116th Congressional Session beginning in January. Rep. Ross has retired from Congress and Sen. Heller did not win reelection, so Rep. Castor and Sen. Tester will likely seek new cosponsors and refile the same or similar legislation early in the new session. At the same time, federal banking regulators have announced their intention to issue rules as required in BW12. The regulators indicated they plan to issue a rule based on the comments they received in late 2013 and early 2016 by February 2019. The final rule could ultimately address concerns that WSIA and other industry parties have sought to clarify through private flood legislation, but how far the regulations could toward addressing those specific concerns remains to be seen. 

Timeline of Legislation

Click here for a one-page overview of the history of this legislation. 


  • On May 30, Congress extends the NFIP for two weeks to June 14. Both the House and Senate had passed extensions that would have taken the program through September 30, 2019, but the Senate version was tied to a disaster relief package, differing from the House version, necessitating a short extension until Congress returned from the Memorial Day recess. 
  • On June 3, Congress returned to Session and passed an extension to September 30, 2019, as part of national disaster relief package. 
  • On June 12, the House Financial Services Committee unanimously passes the NFIP Reform Act (H.R. 3111) and the NFIP Reauthorization Act (H.R. 3167), but neither include private flood insurance provisions. H.R. 3111 creates a five-year pilot program to inspect pre-existing structural conditions of insured and pre-insured properties; requires GAO to study flood insurance coverage treatment of earth movement; makes changes to the claims process including: (1) codifying an enhanced policyholder appeals process established by FEMA for individuals appealing a full or partial denial; (2) requiring the Administrator to monitor and oversee litigation conducted by the WYOs to ensure that expenses are reasonable, appropriate and cost-effective; (3) prohibiting the hiring of disbarred attorneys; and (4) requiring a GAO study on claims adjustment process. It also prohibits false or fraudulent statements in connection with the preparation production or submission of claims adjustment or engineering reports. H.R. 3167 would reauthorize the program through September 30, 2024 (five years); addresses affordability through (1) creating a five-year demonstration program for means-tested assistance to low-income policyholders; (2) repealing surcharges; (3) enabling policyholders to pay premiums in monthly installments; and (4) creating a state revolving loan fund. It would raise the amount of funds available under the Increased Cost of Compliance program, targets mitigation funding for repeatedly flooded communities and authorize additional funding for mapping. Action on the bills is pending in the full House but no companion bills have been filed in the Senate. 


  • On January 19, the federal government is temporarily shut-down when Congress fails to pass its budget. As part of the government shut-down, the NFIP temporarily shuts down as well; however, the government shut-down lasts only through the weekend and results in the NFIP becoming operational again on January 22. As part of the Budget Omnibus package, Congress extends the NFIP through February 8.
  • On February 8, Congress includes the reauthorization of the NFIP in another short-term extension of the Omnibus action, resulting in a new expiration date for the NFIP of March 23.
  • As the March 23 expiration deadline approached, the NFIP is extended through July 31, 2018, separating the NFIP from the budget process.
  • On July 31, Congress issues another short-term four-month extension of the NFIP through November 30, 2018. No actions taken on private flood insurance legislation as part of the extension.
  • On November 30 the NFIP is granted a one-week extension to December 7.
  • On December 6, Congress extends the NFIP for two weeks to December 21, the same deadline for the Continuing Resolution that must be passed to continue funding significant portions of the federal government.
  • On December 21, with the NFIP in danger of lapsing, Congress and the President agree to extend the Program to May 31, 2019 and allow the next Congress to address reforms and long-term reauthorization of the NFIP as well as the technical revisions to the definition of private flood insurance sought by the Flood Insurance Market Parity and Modernization Act. The federal government ultimately shutdown effective December 22 at 12:00 a.m.
  • On December 26, even though the NFIP avoided a lapse with the May 31 extension, FEMA announced its determination that the NFIP cannot issue new or renewal policies while there is a federal government shutdown and declared no new or renewal policies will be issued from December 22 until the shutdown is resolved or in the event that it determines that conditions exist (e.g. a significant impact to the national economy) which might justify the resumption of activities in advance of an appropriation.
  • On December 28, FEMA rescinded its December 26 guidance, noting that NFIP insurers could resume the sale, renewal and monetary endorsements for flood insurance policies and to treat the program as operational since December 21, 2018 without interruption. 


  • Flood legislation was quickly reintroduced in both chambers as H.R. 1422/S.563.
  • On June 21, House Financial Services Committee passes H.R. 1422 as part of a broader package to address reform and reauthorization of the National Flood Insurance Program (NFIP), but the full House and Senate do not pass the legislative package.
  • On September 28, the House adds H.R. 1422 to an unrelated bill to reauthorize the Federal Aviation Authority, but the Senate declines to approve the legislation with the private flood provision.
  • On November 14, the House passed the 21st Century Flood Reform Act (H.R. 2874), a comprehensive flood insurance package with a five-year reauthorization and reform of the NFIP, including the Ross-Castor private flood legislation. The Senate did not take action on this bill and continues to work on various alternative proposals for comprehensive reform and reauthorization. Although the Senate is not expected to take action on this version of the bill, it is expected to provide some form of a companion proposal which would incorporate some of the House bill.
  • On December 8, 2017 the House and Senate both adopted a short-term extension of NFIP to December 22, 2017 and on that date followed with another short extension to January 19, 2018.


  • WSIA legacy organization, NAPSLO, testified in support of H.R. 2901 before the House Financial Services Subcommittee on Housing and Insurance.
  • On April 28, 2016 the U.S. House of Representatives passed H.R. 2901 on a 419-0 vote, after passing the House Financial Services Committee 53-0. Unfortunately, the legislation failed to move in the Senate before Congress adjourned.


  • House and Senate discussions on proposed legislation do not ultimately lead to hearings or passage of the bill.
    Updated information on the progress of this legislation can be found in the WSIA Legislative Updates issued on a regular basis. To view these updates, check out the WSIA News page

Material Supporting Legislation